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DAX consolidating but will it turn into a correction?

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

The market has just put the brakes on the run higher in the past few days and the key question is whether this turns corrective now.

Gains have still been posted in the first two completed sessions this week and the support of the key breakout around 13,336.

As yet it is too early to say, but the momentum is just coming out of the rally this morning and the daily momentum indicators are beginning to roll over as the market trades 40 ticks lower early today.

Look to the hourly chart for clues of this turning more corrective.

Firstly is there going to be a daily close below 13,336?

The intraday move lower today has only marginally breached the support and the hourly momentum indicators are in retreat.

  • An intraday move below support at 13,270 would be a concern if it were joined by a close below 13,336 now.

The hourly RSI below 40 and MACD lines dropping below neutral would also heighten concerns of a corrective outlook.

  • There is resistance now building at 13,400/13,422 and this needs to be breached to re-engage the bulls again.


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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.