The DAX index extends Friday’s losses as it falls 0.15% on Monday. While last week’s disappointing manufacturing data out of the Eurozone caused a negative reaction in the DAX, yesterday’s business climate indicators beat expectations however failed to beat the prevailing pessimism over slowing growth in the Eurozone’s economy burdened by the unsettled global trade war and Brexit uncertainty. Moreover, Today’s German consumer confidence survey came in below estimate and provides no relief on Germany’s economic outlook.
The DAX index reached a low of 11270 before turning higher to end above the 50-day MA at 11346. The daily RSI chart shows a hidden bullish divergence from which price should turn higher from its low at 11270 to test the 20-period MA and resistance level at 11480 which would pave the way for further gains. Failure to surpass the 20-period MA will keep the index ranging lower with a break of the 11270 low required to signal a continuation of the short-term downtrend.