DAX Xetra (cash index)
Can the bulls respond quickly after the decisive downside break yesterday?
Trade tensions between the US and China were certainly a key driver of the move lower, but these periods of bearishness have historically not lasted too long and there will be an eye on how the bulls can now react.
The uptrend channel has been broken, so the outlook is no longer bullish, whilst the underside of the channel now becomes a basis of resistance, currently around 12,700.
An old medium term pivot at 12,600 will though be seen as a gauge and the medium term outlook is increasingly mixed now.
This comes with the moving averages all having converged towards neutral between 12,620/12,665.
A positive reaction has been seen early today which suggests that the immediate selling pressure has been contained, but this band of resistance overhead needs to be overcome to regain some sort of positive momentum.
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