The DAX declined by 0.33% to end at 12115 on Wednesday as US-China trade tensions limits upside pressure. ECB President Draghi reiterates the Eurozone’s vulnerability towards the risks posed by global trade uncertainty and leaves further trade developments as the dominating factor determining market direction. In terms of data, Today Germany publishes CPI data while the Eurozone posts industrial production figure, both of which should reflect on the region’s slowing economic outlook while cautious sentiment should keep a hold on the bulls unless we see positive trade updates.
The DAX may be set for a pullback as price has formed a lower high at 12225 since reaching the high of 12454 in early May. Failure to surpass and hold above 12150 negates the chances of re-testing and breaking the resistance at 12225 as price enters a short-term ranging period bounded by the Bollinger bands. Meanwhile there is a short-term neutral bias on the DAX as the RSI reading has been hovering around the 50 mid-line. Look for price to hold below the 20-period MA and decline below 12050 to indicate selling pressure while a move below the 12000 level would negate the short-term uptrend on the DAX and increase the chances of pullback towards lower support levels.