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DAX continues to test channel support amidst consolidation


DAX Xetra (cash index)

After a day of consolidation on Tuesday, the DAX continues to sit at a near term crossroads as the uptrend channel support is tested.

The gap breakout on Friday effectively remains unfilled at 11,149 as the market sits in a support band 11,149/11,217 with the channel support at 11,190 today.

Momentum indicators continue to sit in their strong configurations with the RSI around 60, MACD lines still rising above neutral and the Stochastics above 80.

There is though a sense that if the channel were to be breached, these momentum indicators could deteriorate quickly, suggesting that the continued trend higher is important.

Ultimately, though on a price basis, the key support is the medium term pivot at 11,000 and only on a breach with a 10,000 handle would the outlook significantly deteriorate.

The question is where the technical would deteriorate significantly before then to call for a downside move.

  • For now, daily candles are fairly neutrally configured around the support band 11,149/11,217.

Furthermore, looking on the hourly chart there is still a strong configuration with hourly RSI still finding consistent support above 40, hourly MACD lines above neutral.

If this changes it would also be a negative call.

  • Initial support is yesterday’s low at 11,159.
  • Resistance is at 11,277 before Friday’s high of 11,321 which is preventing the continuation of the run higher.

 


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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.