- S&P 500 | Fresh Record Highs Raises Scope of Pullback
- DAX | Topside Resistance Caps Further Gains
Source: Thomson Reuters, DailyFX
S&P 500 |The index has made a firm break above the 2900 level to reach fresh record highs. On the topside, the level to watch 2960-65, which represents the rising trendline from the 2018 peak. Getting through there raises scope for a continuation towards the psychological 3000 level. That being said, the size of this week’s gains raises the potential for a near-term pullback as the index looks to consolidate above 2900. The RSI on the daily and weekly time frame show a negative divergence while the former is also in overbought territory, further increasing the risk of a near-term pullback.
S&P Price Chart: Daily Time Frame (Apr 2018 – June 2019)
S&P Price Chart: Weekly Time Frame (Dec 2016 – June 2019)
DAX | Having broken out from its recent consolidation has seen the index move into the 12290-12460 zone. Topside resistance in the form of the May 3rd peak has capped further upside in the DAX for now. However, as long as 12290 holds, the index may indeed continue its bullish momentum with topside targets situated at 12700. A failure to break above however, could see the index return towards its 11900-122900 range.
DAX Price Chart: Daily Time Frame (Dec 2017 – June 2019)
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--- Written by Justin McQueen, Market Analyst
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