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DAX breaking out, but can it hold this time?


DAX futures (Mar 2018 contract FDXH8, continuation contract is FDXc1)

Support on Friday and a strong opening gap higher today have put the bulls right in contention for an upside break again.

An early move above 12,238 but will this be another false upside break from the range?

Technically there is a positive bias to this range and the pressure has tended towards an upside break but it is likely to be a fundamentally driven move that defines whether the breakout will hold.

Tax reform in the US is key and if it successfully gets through, the market can be expected to pull strongly higher.

A close above 12,238 would certainly be a good signal today and with the RSI already at a five week high, the MACD and Stochastics are also positive.

There is gap support now at 13,135 but this could be a gap that the market struggles to fill, certainly if the bulls run on tax reform.

  • The next resistance is c. 13,400 before the key high at 13,525.
  • Today’s low at 13,183 is initial support.

 


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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.