DAX Index managed to regain the bullish momentum after testing the critical support at 12902.57. Things went positive for the German DAX after Trump showed interest to delay the tariffs on EU cars. Though the market sentiment is slightly bullish, DAX Index needs to clear some major resistance.
Currently, the price is testing critical resistance at 13161.15. A daily closing of the price above that level might push the German DAX higher. However, the bullish rally in the DAX index is most likely to be capped by major resistance at 13306.38. Rejection of that resistance level, might result in corrective move in the blue-chip stock market. However, a clear break of the resistance at 13306.38 might result in another extended rally.
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On the downside, we might see an imminent drop in the blue-chip stock market, provided that Trump imposes a tax on EU cars and auto parts from the starting of 2020. On that event, the DAX index might slip lower and target the support at 12902.57.
A daily closing of the price below that level might bring back the aggressive sellers. Eventually, the price might rally towards the next support at 12789.22. Such an extensive downfall might be considered as a corrective move for the current extended bullish rally. Considering all the issues, the bulls are advised to stay cautious as bearish correction in German DAX might take place.Download our latest quarterly market outlook for our longer-term trade ideas.
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