The DAX index fell 0.62% in response to China’s soft GDP figure pointing to an economic slowdown. While the German PPI declined by 0.4%, a major contributor to the DAX index’s performance lies in the global outlook, that is currently faltered by the risks China’s slowdown presents to the world economy. On the domestic front, Germany releases the ZEW economic sentiment report today which, depending on its result, may halt the ongoing pessimism and sustain the index’s uptrend.
While the DAX Index breached the 50-day MA, it remains in bearish territory as the price action sits below the 100-day MA. The daily RSI shows a hidden bearish divergence signaling a reversal on the recent uptrend as it forms a higher top while the price forms a lower top at 11260. Price action is losing momentum and may break below the 20-period MA to target support at 11,000.
Support: 11000/ 10890
Resistance: 11150/ 11260