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Equities Forecast: DAX at Critical Support, CAC 40 Hold Summer Lows For Now

Equities Forecast: DAX at Critical Support, CAC 40 Hold Summer Lows For Now

Justin McQueen, Strategist

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)

Equities Forecast: DAX at Critical Support, CAC 40 Hold Summer Lows For Now

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)

Equities Forecast: DAX at Critical Support, CAC 40 Hold Summer Lows For Now

--- Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX

KEY TRADING RESOURCES:

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

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

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