The DAX made a modest decline of 0.19% on Wednesday following the rally from its previous session as European stocks awaited the outcome of the FOMC meeting. The DAX is likely to find support in response to the FED’s dovish message and increased prospects of a rate cut. Meanwhile the prospects of easier monetary policy from the ECB , as the US-China trade war and Brexit uncertainty add to the ledger of macro risks on the Eurozone’s slowing economy, continues to provide support for European Indices. Today’s focus will be on the ECB’s release of its economic bulletin, while the BOE’s policy meeting is likely to leave no impact as interest rates are expected to remain unchanged given the political uncertainty in the UK.
The DAX failed to edge above the resistance at 12360 and retreated to find support at 12280 before ending at 12308. Buying pressure managed to consolidate price action above the 12300 level while the RSI reading exited the overbought region. Futures are pointing higher today as bullish momentum enables a break above the 12360 level to target the resistance at 12410 while the RSI reading re-enters the overbought territory. Look for a break above 12410 to drive the index towards the 12450 level, while a failure to overcome 12410 should leave price drifting lower with a break below 12360 required to target the support at 12300.