European Equity Analysis and News
DAX
The outlook for the DAX is somewhat fragile with the index trading at its lowest level in 5 months after last week’s breach through the July lows. Eyes will be on for a weekly close below the 12000, which could see the index make a test for the rising trendline support from the 2016 low. A break through the trendline opens the door for a move to 11800. However, the DAX may be offered some slight reprieve with the RSI indicator moving closer to the oversold area, suggesting there is scope for a possible retracement of the recent losses.
DAX Price Chart: Daily Time Frame (Nov 16 – Sep 18)
CAC 40
Similarly, with the DAX, the CAC 40 is also soft, however, the index remains supported by the summer lows situated at 5245. A firm break is needed for bears to extend a move towards the next value area at 5190-5100. RSI indicators however, suggest that there is a scope for a mild pullback and thus providing an opportunity for bears to reload short positions.
CAC 40 Price Chart: Daily Time Frame (December 2016 – September 2018)
--- Written by Justin McQueen, Market Analyst
To contact Justin, email him at Justin.mcqueen@ig.com
Follow Justin on Twitter @JMcQueenFX
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Other Technical Forecast:
Australian Dollar Forecast: AUD/USD Cleared to Descend to 2016 Lows as Key Support Gives Way
US Dollar Forecast: Dollar Best Hope to Stave Off Head-and-Shoulders Breakdown is a Euro Drop
