The DAX traded 0.47% higher on Friday as it erased part of the losses prompted by the ECB monetary policy meeting. The ECB disappointed markets last week as the central bank opted not to cut rates but remained dovish as ever suggesting that a rate cut would occur in the near future. In terms of data, US Q2 GDP slowed to 2.1% however beat its forecast of 1.8% and provided support during the day. This week, we will see the Fed take its turn in the spotlight as markets are hoping the FOMC meeting would not disappoint and deliver a rate cut. With no major economic releases out of the Eurozone, we should see the resumption of US-China trade talks this week draw attention and influence sentiment while hopes of looser monetary policy from central banks continue to buoy global equities.
The DAX gained 57 points to end at 12419 on Friday. The price managed to recover from its low of 12295 however faced resistance around 12450. Look for price to hold above the 12380 level near the 50-period MA to indicate buying pressure with a trade through the resistance near the 20-period MA at 12460 required to enable further gains towards 12550. Alternately, holding below 12380 would indicate selling pressure while a break below the key support at 12300 should target the 50-day MA at 12250.
Resistance: 12450 /12500