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Can the bulls survive payrolls for the breakout?

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.

  • The hourly chart shows the improvement near term but also a move below initial support at 12,402 would be a disappointment now.
  • The bears are back in control below support at 12,285.


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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.