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DAX pivot at 12,460 is becoming increasingly key


DAX Xetra (cash index)

The bulls are under increasing pressure as the breakout supports have now been breached and the support begins to turn into resistance.

Exactly how the market responds to losing the support at 12,460 today could be key to the near term outlook, with the ECB also in focus.

Last week it had seemed that the bulls were using the breakout support at 12,460 as a basis of support, however in a sharp move to the downside yesterday, this support has been broken, turning into resistance.

This has comes as momentum indicators are now starting to deteriorate.

The Stochastics (which are the most sensitive of the three indicators I look at) have now given a near term sell bear cross signal, the MACD lines are close to a similar bear cross whilst the RSI has backed away from 60.

  • An early rebound today has been contained with the highs around 12,460 and unless the market can quickly recover to close above this pivot then the bears will be regaining control.
  • The move yesterday cut through the support at 12,375 and although bounced from 12,312 there is now an open way to the nest support within the recovery at 12,257 above the near to medium term pivot at 12,160.

On the hourly chart there is now a corrective configuration on momentum and rallies now seem to be a chance to sell.

There is likely to be a rise in volatility around the ECB meeting this afternoon but unless there is a decisive close above 12,460 the outlook is now deteriorating.

 


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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.