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DAX slipping again but is it a chance to buy?

DAX Xetra (cash index)

The slip in the past couple of sessions now threatens to drag the DAX back to the first key support, just how traders react to the breakout around 12,460 will be key for the near to medium term outlook.

With the market never confirming the breakout above 12,600 (intraday peak at 12,640) and the market has just been drifting lower in a move that has now broken the recovery uptrend of the last two weeks.

The first key test though comes with 12,460 as a confirmed breach would begin to suggest a correction is resuming once more.

Currently the momentum indicators are not reflecting this drift lower and are holding up well on the daily chart so there is not a lead  from the technical signals being seen.

For now this is a contained correction and a move that finds support around (or preferably above) 12,460 would be seen as another chance to buy on the DAX.

  • This is reflected on the hourly chart which has simply unwound back towards the latest breakout around 12,524 whilst the hourly momentum indicators are well within their bullish near term configurations still and suggest that weakness remains a chance to buy.
  • The first real reaction low comes in at 12,375 and a break below this would confirm that the bears are regaining a key footing in the market again.

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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.