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DAX traders wait for ECB as top pattern threatens


DAX futures (Dec 2017 contract is FDXZ7, continuation contract is FDXc1)

 

A sharp intraday sell-off yesterday has heaped the pressure back on for the bulls, can they maintain the support in the wake of the ECB meeting?

The market has been consolidating for the past few weeks in a range of around 190 ticks and a key breakout could easily be seen today.

With the move into all-time high ground finding resistance at 13,089 the bulls have been fluctuating around the 13,000 level in the past few days.

However, a failure at 13,042 at yesterday’s high was followed by a sharp drop back to test the key support of the past few weeks at 12,900.

This has now been the third time in three weeks that the market has held a test of the support, however technical momentum sell signals suggest that the bears are looking to grasp control now.

  • A close below 12,900 would complete a top pattern and imply 190 ticks of downside to 12,710, whilst the next real support does not come in until 12,655.
  • For now the hourly chart suggests a continuation of the range with near term resistance in the band 12,975/13,000.
  • Key resistance comes in the band 13,040/13,089

There is likely to be a strong reaction on the DAX to today’s ECB meeting announcement and this is likely to dominate market moves in the coming days.

 


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