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DAX continues to pull higher eyeing confirmation of a key breakout

DAX Xetra (cash index)

A strong session added almost 200 ticks to the DAX yesterday, posting a strong bull candle and the market now stands on the brink of a crucial breakout.

The original rebound from the sharp February sell-off saw the market failing at 12,600 and this has been key resistance ever since.

However during yesterday’s gains the market saw an intraday breach of this resistance.

Although failing to hold the gains into the close the market is again testing higher this morning and a closing breach would complete a remarkable turnaround for the outlook that has built over the past three weeks.

Daily momentum indicators are increasingly strong, with the RSI now pushing into the 60s, MACD lines rising above neutral and Stochastics strongly configured.

This suggests the continuation of the uptrend recovery gains with weakness being bought into.

  • A run of higher lows is now being left above the previous pivot support at 12,160, with support now at Monday’s low of 12,375.

The hourly chart shows positive configuration as the market looks to push higher, however could be a touch stretched in the immediate outlook.

This could result in some sort of unwinding consolidation, with recent higher lows coming just under previous breakout levels.

  • This could mean a slip back towards 12,475/12,524 near term but with the strength of the trend technicals that would be seen as a chance to buy.
  • Above 12,600 the next resistance band is above 12,745 and then around 13,000.

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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.