The German blue-chip index rose 0.90% on Wednesday at the back of President Trump decision to delay auto tariffs on the EU. Given that the auto industry is a backbone of the German economy, the news was a sigh of relief amidst the US’s ongoing trade war with China which has proved a drag on global equities. In terms of data, Eurozone and German 1st quarter GDP figures were in line with expectations and provided little influence. Today, trade headlines should be monitored as President Trump reportedly intends to restrict Chinese telecom Huawei’s business with US companies which could provoke a reaction from China. In addition, The Eurozone publishes its trade balance data which is estimated to show an increase in trade surplus.
The DAX extended gains on Wednesday as it ended above the 12,000 level at 12099. The price is currently sitting in the resistance zone bounded by the 20 and 50 period MA at 11970 and 12090 respectively. If price manages to break above the 12090 level, look for a potential move towards resistance at 12200. Failure to edge above 12090 will leave the DAX ranging above the 12000 level, with a move below 11970 required to indicate selling pressure while a break through the low at 11850 targets the support at 11800.
Resistance: 12140 /12200