DAX Xetra (cash index)
Given the concerns over risk appetite that have increased recently, yesterday’s intraday rebound on the DAX shows the bulls are still fighting.
Reaction to a bullish engulfing candlestick will be key today.
It was interesting to see that the DAX closed at 11,419 which is a shade above the 11,370/11,415 pivot band means that there is a potential swing higher in process, but this needs to be backed up by a positive candle today.
A decisive move clear of 11,370/11,415 would be a key positive reaction but there are still warning signs that come with the broken three month uptrend and two day close below 11,370 in recent sessions.
This is a crucial crossroads, with the RSI picking up from the low 40s (similar to February) whilst the Stochastics are crossing higher.
If the bulls can dust themselves off and build support once more, then this could still be a buying opportunity.
The hourly chart has ticked higher and a mini downtrend has been breached, but this move needs to continue, in order to maintain the improvement in momentum.
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.