DAX 30 Needs To Break 10,863 for a Christmas Rally
- The DAX trades sideways and a Christmas Rally looks far away
- Whilst U.S. GDP and housing data is on tap, I expect action will be delayed until tomorrow when U.S. Durable Goods orders will be on tap
The DAX remains trapped in the 10,420 to 10,863 range and traders looks to be winding down positions ahead of the Christmas break. For price momentum to pick up we would need a break to the 10,420 - 10,863 range, until this happens the DAX is expected to trade sideways.
Data on tap this afternoon is U.S. GDP for the third quarter, U.S. house price index, Existing home sales, and Richmond Fed manufacturing index. These indicators might trigger a breakout, but I doubt they will be enough. Instead, tomorrow’s U.S. durable goods orders will be a better candidate to trigger a multi-day rally.
If the DAX breaches its upper end of the 10,420 - 10,863 range, it might be the beginning of a Christmas rally which can take the DAX on towards 11,430. A break to the lower limit of 10,420 may take it to last week’s low of 10,122.
Given that the FTSE 100 is bearish and capped by last week’s high, I give it a great likelihood of a bearish DAX breakout.
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Created with Marketscope/Trading Station II; prepared by Alejandro Zambrano
--- Written by Alejandro Zambrano, Market Analyst for DailyFX.com
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.