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DAX continues to fall as contagion risks impact

DAX Xetra (cash index)

Selling pressure through European equities have really hit the DAX and the outlook has shifted significantly in the past couple of sessions.

A huge bear candle on Friday and further weakness today has broken through a series of key support at not only 12,493 but also now 12,400.

This comes with momentum indicators increasingly corrective as RSI falls below 40, MACD lines accelerate lower following a cross sell signal and the Stochastics gaining downside traction.

  • There is a gap open at 12,390 which needs filling but that means that the 12,400/12,493 range now becomes a key basis of overhead supply and resistance.

Another lower high under here would be a selling opportunity.

  • Breaking the 12,400 support effectively opens 12,104 as the next key support (June low).

Although this is clearly a volatile time on equities, but rallies are now a chance to sell as the technical suggest further downside potential.

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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.