DAX futures (Sept 2017 contract is FDXU7, continuation contract is FDXc1)
Is this morning’s rally on the DAX a rally that we can trust this time?
DAX futures have made a near term upside break above the neckline resistance of 12,487 from the two month top.
The market had spent the majority of last week bumping up against the resistance and failing, but with a strong open today, seems to have broken the shackles.
The next move is to close above the resistance to confirm the breakout.
- This would then imply an upside target of 12,680.
A rebound such as this down not necessarily end the outlook for a correction, however it does increase the chances of a bull recovery.
The market still has the two month top in place and would need to retrace over half of the 460 tick pattern (so 230 ticks above 12,487 which is 12,717).
The hourly chart shows an improvement with this move, trading above the hourly moving averages and improving momentum.
Continuing to trading above 12,487 will be key for the improving outlook from continuing.
- There is support building above 12,400.
- Key resistance to breach to change the outlook bullish again on a medium term basis is 12,730.