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DAX consolidates as the rally runs out of steam


DAX Xetra (cash index)

A rebound added 74 ticks yesterday is forming a positive candle, but in the context of recent selling pressure, this has been a relatively small reaction higher whilst today’s consolidation questions the longevity of the recovery.

Momentum indicators on the daily chart remain solidly correctively configured, with the RSI struggling under 40, MACD lines tracking lower and Stochastics bearishly positioned. This all suggests that the rally will struggle and to expect renewed selling pressure to take hold once more in due course.

  • The June low at 12,104 may remain intact after the pick up from 12,120 on Wednesday, but this is likely to be retested as rallies remain a chance to sell.
  • There is initial resistance at 12,295/12,323 under the old support at 12,400.

However the hourly chart suggests the rallies struggle in the 45/55 region on the RSI whilst the MACD lines continue to reflect a negative configuration.

  • The support is initially at 12,182 trying to protect a retest of the lows.

 


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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.