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DAX bulls need to react to prevent a corrective outlook


DAX Xetra (cash index)

Equity markets have slipped back in recent days, but is interesting to see the slippage has been relatively contained on the DAX.

In fact, considering the gains of the last few weeks, the negative candles that have been posted are still just a small unwind.

The near term outlook though will be determined by how the market reacts to the breakout support at 12,460.

A failure to break decisively through resistance at 12,600 from the late February high would have been a blow for the bulls.

  • A subsequent failure of the support at 12,375/12,460 would increase concern that the market is moving back into correction mode.
  • A run of higher lows comes initially with the support at 12,375 and a closing breakdown would confirm the bulls had lost momentum of the recovery.

For now though this is simply a consolidation, with a run of slight unwind, reflected in the very small candlestick bodies.

Today’s early move lower needs to be contained quickly by the bulls, as the hourly RSI is at 3 week lows, but the hourly MACD lines are still above neutral (just).

  • Resistance is growing at 12,600/12,640.

 


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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.