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DAX bulls gaining confidence as recovery makes headway


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

With the bulls making headway again today, traders will be asking themselves whether one trading session change the course of the market.

The positive reaction to the intraday selling pressure has formed a big turnaround and a large bullish engulfing candle.

This move pushed to close above the resistance at 12,373 leaving a higher low at 12,062 in the process.

Momentum indicators still need further improvement to confirm the recovery but the signs are increasingly positive now.

  • A decisive move clear of the 23.6% Fibonacci retracement of 13,596/11,900 at 12,300 now opens the 38.2% Fib level at 12,548.

For now this is still an unwinding move of the huge sell-off but the bulls are gathering confidence now.

The hourly chart shows a break above resistance at 12,373/12,400 whilst the hourly RSI has pushed above 60 and hourly MACD lines above neutral.

These are key near term moves that will improve confidence of a stronger outlook.

Intraday corrections will now start to be seen as a chance to buy and the 89 hour moving average which had been resistance is now supportive around 12,310.

  • This leaves a near term buy zone on support between 12,310/12,400.
  • Next resistance at 12,642 with the old January low around 12,730 now being 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.