DAX Xetra (cash index)
With risk appetite seemingly continuing to improve the outlook for the DAX has picked up and yesterday’s breakout brings the market to an interesting technical position.
On a near term basis, the outlook has been improving over recent sessions and yesterday’s close marginally above 12,440 which had been a resistance has now put the bulls in a decent position ahead of payrolls.
Momentum indicators have been ticking higher, with the Stochastics now with a near term buy signal, RSI improving and MACD lines threatening to cross higher too.
The initial reaction higher today has been tempered (reasons to be cautious still ahead of payrolls), but there will also be interest in how the market reacts to the significant overhead supply between 12,547/12,600 from the previous key breakdown.
Yesterday’s high of 12,516 is still yet to be breached and is initial resistance this morning.
The formation of a negative candle on the session (close below the 12,506 open) at the end of today could question the viability of the run higher and whether the selling pressure overhead is set to weigh on the rally.
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