The DAX closed 1.08% higher yesterday at 12355.7 as investors brushed aside concerns about the U.S China trade war, with European shares riding this trade relief rally led by U.S equities registering new highs. Gains in the Basic Resources, Chemicals and Construction sectors pushed the index higher. German automakers also took in the positive news; with BMW, Daimler, and Volkswagen in the top 10 gainers in yesterday's session. In economic news, German Manufacturing PMI is expected to be released at 07:30 GMT, along with the Eurozone Manufacturing and Services PMI at 08:00 GMT.
DAX broke our upward trend channel to the upside with a price target of 12419 which coincides with the 200 period-SMA on the H4 chart at 12420. Very strong bullish momentum as RSI is registering an above 90 reading in the overbought area while price reaches an important resistance level at 12407.4. Market will either retrace or further continue rallying depending on whether the resistance level holds.
Support: 12250.1 12161.5
Resistance: 12407.4 12481.9