DAX analysis 07/09/2017

DAX futures (Sept 2017 contract is FDXU7 and expires on 15^th Sept, continuation contract is FDXc1)

 

The bulls are increasingly taking control once more, but the key overhead resistance still needs to be breached.

A growing sense of positivity has been developing in the past few days as bullish candles have been forming.

This has been putting pressure on the 11 week downtrend and that downtrend was decisively breached yesterday by a strong bullish candle.

This move has been confirmed by the RSI rising this morning well above 50 and to an 11 week high, the MACD lines pulling higher and the Stochastics also at a four month high.

• The market has opened higher again today and there is a direct test of the key overhead resistance at 12,300/12,340.

This has been pivotal in recent months and capped the gains throughout August.

The momentum indicators suggest that this resistance will come under increasing scrutiny.

• A close above 12,300 has not been seen since late July whilst an intraday move above 12,340 would really start to give the bulls the upper hand in a recovery as it would also complete a big base pattern.
• The next resistance is 12,487.
• The hourly chart shows 12,210 is supportive with 12,050 now key for the continued positive outlook of the recovery.

Hourly momentum is also positively configured.

The one big caveat is that the ECB is this afternoon which will increase volatility but technically the DAX futures are increasingly positive again.