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Slip back means the DAX enters a key phase


DAX Xetra (cash index)

An acceleration of the selling pressure on Friday has seriously questioned the prospects of a recovery in the DAX.

Previously, the pivot around 12,600 has been a key gauge and the decisive close back below this pivot on Friday coincided with a decisive breakdown of a uptrend channel.

  • However, the selling pressure has been contained to an extent with the intraday rally off 12,470 and this is an initial level to watch as the market has dropped back again early today.
  • The first higher reaction low comes in at 12,400 from a mid-July support and will be the key support to watch in the coming sessions.

Early losses have been bought into so far, but the bulls have work to do in order to recover a degree of control.

Momentum indicators are now more mixed, with the RSI and MACD lines around their neutral points, whilst the slip in the Stochastics reflects more the sell-off that closed last week.

  • Levels to watch are now 12,400 for a ramp up in bear pressure, whilst a move back above the 12,600 pivot again turns a more positive outlook ahead of last week’s high at 12,779.

How the market leaves this 200 tick trading band could be key now.

 


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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.