Dax Index
DAX Index started the trading week yesterday with a gap up on growing optimism over a trade deal between the two biggest economies after Wilbur Ross, the Commerce Secretary said that licenses for US companies to do business with Huawei Technologies would be coming very shortly. Traders digest the third interest rate cut by FOMC and better factory activity in China which expanded at its fastest pace since February 2017 as the Chinese Manufacturing PMI came in at 51.7, beating expectations of 51 in October and 51.4 reading in September.
Yesterday the Germany Manufacturing PMI came in at 42.1 topping expectations of 41.9 in October. The European Monetary Union Markit Manufacturing PMI came in at 45.9 beating expectations of 45.7 in October.
DAX positive momentum keeps pushing the index to fresh yearly highs with small daily corrections making lower lows and higher highs as the Dax benchmark trades above all major daily moving averages and inside the ascending channel which started back in December 2018. Dax has reached overbought levels as the RSI 14 suggests at 74.72 a level that we haven’t seen since early May 2019.
On the upside, the immediate resistance stands at 13,158 today’s high, a convincing break above might drive the index up to 13,368 the high from January 29th, 2019. Bullish momentum for Dax benchmark will be intact as long as the index trades inside the ascending channel which started back in December 2018.
On the flip side, immediate support for DAX index stands at 13,120 today’s low, while sellers below that level will target the low from October 23rd at 12,700. Next support level for DAX index stands at the 50-day moving average at 12,376.