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Bulls eyeing a rebound, but how long can it last?


DAX futures (Mar 2018 contract FDXH8, continuation contract is FDXc1)

Volatility remains significant on the DAX as yesterday’s huge sell-off with renewed fear in global equities meant that the futures pulled back towards the lows again.

However this morning there is a degree of support coming in again, with Tuesday’s key low at 12,070 still intact.

The market has rebounded by around 60 ticks today but the question is whether this rebound will once more be sold into.

That appears to still be the most likely scenario playing out.

On a technical basis the momentum indicators are somewhat negatively configured on both the daily and hourly chart too.

The hourly chart shows the hourly RSI failing around 60 and MACD lines failing around neutral.

This is classic sell into strength configuration.

  • The hourly chart shows the 55 hour moving average (around 12,440 currently) is a basis of resistance since the sell-off really started to gain traction a couple of weeks ago.
  • There is room for a rebound, with initial resistance at 12,315/12,405.
  • It would need a recovery above 12,642 to really suggest the bulls are gaining real traction, but even then the old key low at 12,731 would need to be overcome.

 


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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.