DAX futures analysis 07/07/2017

DAX futures (Sept 2017 contract is FDXU7, continuation contract is FDXc1)

 

Yet another failure of the technical rally at the neckline of the breakdown at 12,487 adds to the downside pressure building.

Yesterday’s strong bear candle may have closed off the lows of the day but further opening weakness today suggests that the market is positioning for a test of last week’s low at 12,303.

Daily momentum indicators continue to suggest that having broken the two month trading range 12,487/12,949 rallies are a chance to sell.

The RSI is struggling back below 40, the Stochastics are tracking lower and the MACD lines are falling decisively below neutral.

  • The hourly chart shows that within this week’s consolidation (12,303/12,492) there is a mid-range resistance now around 12,400.

Hourly momentum also suggests a more negative configuration with the RSI consistently failing around 60 and MACD lines turning lower around neutral, meaning selling into strength is increasingly taking hold.

  • Today’s Non-farm Payrolls announcement at 1330BST is likely to drive a subsequent break of this range of around 190 ticks, however there is a feeling that even if this is a move higher, the overhead supply now betweeb 12,487/12,525/12,610 will house the next lower high.
  • The downside break would re-open the implied 2 month target of 12,030, with initial support at 12,527.

 

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