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DAX on the brink of a huge downside break

DAX Xetra (cash index)

An acceleration of the selling pressure has brought the DAX all the way back towards the key February low again with 12,003 once more in the firing line.

The concern is that if the market does indeed breach 12,003 could it be that the recent recovery move has simply been a rising wedge consolidation within the sell-off?

An exceptionally important support comes in with the old August 2017 low at 11,869 and if this were to be broken then it would actually complete a huge long term top pattern.

Momentum indicators are turning strongly negative again with renewed downside potential as the RSI drops towards 30 (the February low at 25) whilst the MACD and Stochastics are also strongly deteriorating again.

The hourly chart shows that there is a gap open at 12,143 which is now a basis of resistance today, whilst the early traded high at 12,081 adds further resistance.

Hourly momentum indicators are sharply negative and show that intraday rallies are a chance to sell as the pressure ramps up on the key supports.

The hourly chart also shows that 12,284 is now forming as a near term pivot and is resistance.

A downside break below 12,003 opens an implied downside projection of 600 ticks towards 11,400.


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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.