DAX futures (Dec 2017 contract is FDXZ7, continuation contract is FDXc1)
After yesterday’s strong decline, this is the first real test that the DAX bulls have faced for several weeks.
A bearish engulfing candle (bearish key one day reversal) has significantly changed the tone of the bull run.
The market has been trending strongly higher for the past ten weeks but the near term reversal pattern could now begin to usher in some profit taking.
For now, this is largely an isolated bearish signal but the momentum indicators are notable less positive now.
The cross lower on the Stochastics (which is yet to be a confirmed sell signal) along with the MACD and RSI losing impetus are warning signals.
The reaction of today’s session could though be key and initially the bulls have pulled higher in the early moves of the session.
ON the hourly chart, momentum is not decisively correctively currently, but as with the daily chart, the impetus for profit-taking would grow with another negative move today.
At Hantec Markets Ltd we provide an execution only service. Any opinions expressed by analyst Richard Perry should not be construed as investment advice or an investment recommendation. This report does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Forex and CFDs are leveraged products which can result in losses greater than your initial deposit. Therefore you should only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.