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.