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DAX making a move higher, but can it be sustained?


DAX Xetra (cash index)

Considering the looming geopolitical (US/China tariffs dispute) and Non-farm Payrolls tomorrow, the opening gains on the DAX this morning signal a remarkable resilience of the bulls, but can a breakout be sustained?

For over a week now the market has been building within a trading range 11,997/12,440 but this morning a drive to buy has pulled the market above 12,440.

The medium term outlook continues to suggest that near term rallies under the key pivot at 12,600 remain a chance to sell.

This outlook is being tested early today.

Momentum indicators are ticking higher and the Stochastics crossing back above 20 would be a key move.

  • A closing break above 12,440 would open for a test of the 12,600 neckline again, but looking at the momentum indicators over recent months, other than the April into May rally, strength has tended to be sold into since February.

There is little technically to suggest that this can be a sustainable rally yet, but pulling above 12,600 would pose serious questions again.

  • Nearer term, there is a gap still open at 12,350 and yet to be filled from yesterday’s high

Technically, the hourly momentum indicators show an improving outlook now is growing, but much more needs to be done to suggest this move is sustainable as the RSI is yet to pull above 70 and MACD lines are only marginally positive.

  • There is minor resistance at 12,580.

 


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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.