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DAX bulls finally breaking the shackles of resistance

DAX Xetra (cash index)

DAX traders have returned from a day off and come in with a spring in their step again to drive a key upside break.

Monday’s positive session meant that the DAX had closed above 12,600 for the first time since 5th February and early gains today seem to be now finding traction for the upside.

Recent weakness in the euro is certainly a factor that is helping to drive the market higher, but this reaction today will increase the confidence the bulls now have.

This is a move that is a long time coming and trading above the resistance band 12,600/12,647 seems to be a decisive break.

The fact that it is coming with the RSI confirming the near three month high, whilst MACD and Stochastics lines are also pulling positively higher reflects the market breaking the shackles.

The next step would be for a solid bull candle to be formed today, including a closing level above 12,647.

This would give the bulls confidence that there is conviction in the breakout.

  • Initial resistance at 12,745 is now under threat this morning, but a close above there would then suggest that 13,000 was open.
  • We see on the hourly chart an excellent upside reaction initially, with breakout support 12,627/12,647.
  • An uptrend of the past four sessions rises at between 12,600/12,650 during today’s session.
  • The higher low at 12,518 is now a key gauge for the bulls too.

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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.