DAX futures (Mar 2018 contract FDXH8, continuation contract is FDXc1)
Just when you think the breakout has been seen there has been a sharp pullback which has brought the market back to an important near term crossroads.
How do the bulls react to this retracement?
An intraday move lower in early trading today suggests that the bulls have lost control of the breakout.
Yesterday’s close back below 13,238 questions the breakout, but now we see the market unwinding back towards 12,135 which is the gap support.
Today’s low at 13,140 has all but filled the gap and it will be interesting to see how the bulls respond now to this early decline.
Momentum indicators are broadly positively biased now and there is an outlook to suggest corrections are now a chance to buy.
The response to filling this gap could now determine the continuation of this outlook.
A look at the hourly chart shows the hourly momentum indicators have unwound now back to levels where the bulls should become interested and this could now be seen as a chance to buy.
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