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DAX looking to stabilize but resistance prevents a recovery

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

After the selling pressure of recent weeks, the market seems to be finally looking to settle down again.

The huge volatility has subsided to an extent and violent intraday swings have not materialised yet this week.

This comes with the Average True Range of 292 ticks whilst yesterday’s daily range was just 122 ticks.

  • A rebound early today back above yesterday’s high has now left an initial support at 12,175.

Momentum indicators have settled but are yet to suggest the buyers are ready to sustainably return.

There is initial resistance from Monday’s rebound high at 12,373 which needs to be overcome and this is a key barrier for a recovery now.

Above 12,373 would mean higher lows and higher highs starting to form.

The hourly chart shows old support around 12,400 also needs to be overcome, whilst the hourly RSI is still struggling to make it back above 60.

If the hurdle of US CPI can be overcome without any significant increase in volatility again then traders could begin to seriously contemplate a recovery.

  • However these barriers between 12,373/12,400 need to be overcome.


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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.