The DAX rose 1.35% on Friday alongside Asian markets led by positive cues from the US earnings reports and hopes of a US-China trade progress, helping offset global growth concerns. On a domestic note, German business confidence fell short of estimate, emphasizing ECB President Draghi’s remarks on increasing downside risks to the eurozone’s economy. However, that didn't stop the upside move on the DAX. While US-China trade developments remain a sentiment driver, ECB President Draghi will deliver another speech that might draw market’s attention today.
The DAX index managed to extend gains as it broke past the resistance at 11,260 to form a higher high at 11320. However, the RSI forms a lower high confirming a bearish divergence that will enable price to fall to the trend line around support of 11130, before extending its gains. The short-term uptrend off the lows has to be broken for us to see a retracement below the support of 11,000 on the DAX.
Support: 11120/ 11000
Resistance: 11330/ 11420