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Can the bulls sustain momentum to test resistance?


DAX Xetra (cash index)

Another positive open on the DAX will have the bulls believing that a breakout above the March high could be imminent, however, this is a rally that continues to pose questions.

The downtrend channel was broken by yesterday’s opening move higher but the market slipped back into the close to leave a bearish one day candle (even though there were gains on the day).

A further open higher today could be threatening a similar move, with the resistance at 12,460 still intact.

Despite this though there is an improvement that continues to show through on the momentum indicators

It will be interesting to see how the market reacts to the opening gap higher today.

  • Already the gap above yesterday’s intraday high at 11,371 has been all but filled but if the market drops back to “close” this gap then it would be another session where the bulls have failed to capitalise on initial gains.
  • The March high at 12,460 is a key lower high and protects the late February key reaction high at 12,600 meaning that this is a key band of resistance just overhead.

This is the big risk for further gains in the coming days.

  • The hourly chart shows support growing around 12,200 with the pivot around 12,160 key near term.

 


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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.