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Despite German election the DAX outlook remains positive


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

 

Technically the DAX remains a buy into weakness, however the reaction to the uncertainty of the German election result could muddy the waters a touch.

The market has been pulling higher effectively in a “rising wedge” and the early drop back in DAX futures today simply looks to be another unwind into support.

  • Holding above 12,500 support which was the basis for last week’s higher low will be key to continuing this positive outlook of the wedge.

Momentum indicators are still strongly configured with the RSI above 60 and Stochastics holding well above 80.

The hourly chart shows an opening gap lower from Friday’s close at 12,605 whilst it is interesting to see the hourly RSI again bouncing from 40 and the hourly MACD lines back at neutral which is where the buyers have previously been tempted.

If the initial fallout of the German election can be contained then this will again be a buying opportunity to test higher.

  • Friday’s high at 12,637 is initial resistance protecting the July high at 12,655.

 


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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.