DAX Xetra (cash index)
Is the selling pressure beginning to subside?
That is the question DAX traders will be asking themselves after a couple of weeks of consistent and decisive moves lower that have broken key technical levels.
The DAX posted a long legged Doji candle on Friday (which included a marginal gain of 4 ticks).
This was the first session since the selling pressure really ramped up through last week, where the DAX had not closed towards the low of the session, and included an intraday rebound of 70 ticks from Friday’s low at 11,888.
There has been an early slip again today but once more it seems as though the selling pressure is being contained.
This all comes in the backdrop of the RSI which has dropped to 30 but is now looking medium term stretched as this is where the bulls have tended to return throughout 2018.
Looking on the hourly chart there continues to be this sense that the momentum indicators are hinting at a slowing of the selling, with a mild positive divergence on the RSI, whilst MACD lines have now crossed higher.
If the hourly RSI can move into the mid-40s it would suggest there is a developing positive momentum.
Today’s session could therefore be an important step.
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