DAX Xetra (cash index)
A sharp intraday rally has brought the DAX back to the confluence of a key near term crossroads.
This comes as the market continues to throw off mixed near term signals.
The bulls will have certainly been encouraged by the strength of the rebound yesterday after opening lower only to close strongly higher on the day and post a strong bull candle.
However there is a band of key near term resistance from the 23.6% Fibonacci retracement of the big sell-off at 12,248 an the old support of the low at 12,283.
This band has capped the past couple of sessions and is again an early barrier today.
This also coincides with the resistance of a six week downtrend of the sell-off.
A consolidation is playing out early today ahead of the key ECB monetary policy announcement today but the importance of this confluence of resistance is growing near term.
However, a continuation of this downtrend would be a disappointment for the bulls now, given the strength of yesterday’s bull candle.
Indicators on the hourly chat reflect this consolidation.
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