- Improving trade negotiations over the week with positive soundings from US-Sino trade talks have sustained an intermediate-term bullish theme for global equity averages into this week after a solid consolidation tone throughout last week.
- Furthermore, reports over the weekend that the UK is considering extend Article 50 by 3 months have been taken as a positive in the ongoing Brexit saga, bolstering European and global equity markets.
- Here we look in more detail at a key European equity average, the German benchmark index, the DAX.
DAX bull trend remains intact
A firm rebound Friday above 11470/500 and again overnight to another new cycle high to reject Thursday’s setback that held above 113125 support, reenergising bullish forces from last Wednesday’s strong advance above the key swing high at 11385, keeping the bias higher for Monday.
The mid-January probe above key 11245 set an intermediate-term bullish theme.
- We see an upside bias for 11511; break here aims towards a key level from December 2018 at 11558, then maybe even 11600/610.
- But below 11395.5/385.5 opens risk down to 11312.5.
Intermediate-term Outlook – Upside Risks: We see an upside risk for 11558.
- Higher targets would be 11814.5 and 12436.
- What Changes This? Below 10779/778.5 shifts the outlook back to neutral; through 10673 is needed for a bear theme.
Resistance and Support:
4 Hour Chart