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DAX bulls struggle as the recovery threatens to fizzle out


DAX Xetra (cash index)

A recovery from the range low has failed to kick on as the risk recovery has failed to substantially follow through into the DAX.

The rebound yesterday closed only marginally higher and formed a negative candlestick across the session with a close of 35 ticks below the open.

There is still a gap open at 12,780 which needs to be filled, however the reluctance to back a rebound is a concern for the bulls as the market continues to trade close to the key neckline support around 12,600 which has been the basis of the range in recent weeks.

Within this, momentum indicators are hovering around key levels and although the RSI is holding above 40, the MACD lines tracking lower are threatening to go below neutral and could be a signal for a downside break of 12,600 if the bulls cannot substantially pull higher in the coming days.

A close below 12,600 would be a key development now.

  • Yesterday’s high at 12,760 adds to resistance overhead, with today’s initial high at 12,720.

On the hourly chart the RSI has already started to track back lower again below 40 and the Stochastics also reflect the initial deterioration.

  • The bulls are really struggling for traction and the risk of a break below 12,600 is growing.
  • The current spike low for June is 12,547.

 


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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.