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DAX bulls attempt to break the consolidation


DAX Xetra (cash index)

After another mixed session yesterday, the bulls have tried to make another move today, but can they sustain the momentum this time?

Since the uptrend channel was broken last week, the outlook has been increasingly questionable.

This was again seen with a closing level once more almost bang on the old medium term pivot at 12,600 yesterday, having failed in a run higher earlier in the session.

Near term resistance has been around 12,700, with yesterday’s high of 12,715 before dropping back again.

The bulls are having another go again today with early gains, but it was interesting to see that yesterday’s high came around the underside of the old uptrend channel (which today comes in at 12,725).

  • Closing above 12,700 would be an improvement for the bulls, but whilst the market trades under the old uptrend channel, there will still be a sense of resistance to the move.

Momentum indicators are uncertain too, but there is a mild positive bias just coming through now as the Stochastics tick higher whilst the RSI and MACD lines are above their neutral points.

The hourly chart shows this rebound into the resistance but the move has simply unwound overstretched hourly MACD lines to neutral.

Is this another near term rebound that will struggle?

  • The resistance around 12,700/12,725 could be key today.
  • Initial support is 12,600 again, with 12,493 increasingly key.


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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.