The DAX traded sharply lower as it fell by 2.18% on Tuesday at the back of negative corporate earnings and pessimism over US-China trade relations. Just as the two nations resumed a round of trade talks this week, President Trump attacked China in a series of tweets and lessens the likelihood of a breakthrough. In terms of data, Germany published retail sales data which rose by 3.5% in June and has yet to release employment data. The data may have a muted impact on the day as the FOMC meeting will be markets’ main focus. The FED is largely expected to cut interest rates by 25 basis points which would support global equities amidst weak sentiment towards US-China trade relations.
The DAX dropped by 270 points to end at 12147 on Tuesday. The price traded through the 50-day MA at 12250 and targeted the 100-day MA to record an intra-day low of 12094. The 100-day MA near 12090 should provide the DAX with support during the day if bearish momentum were to stall. Otherwise, the bearish development would extend itself to the support at 12040. Look for a trade above the 12200 level to indicate buying pressure target the dynamic resistance provided by the 50-day MA at 12250.
Resistance: 12200 /12250