DAX: Upside Carnage Continues, Major Price Zone Next Stop
- The DAX continues its strong multi-day performance
- Well above eyed resistance
- On its way to pivotal 10000/100 zone
Yesterday marked another day of strong risk sentiment across global equities. The DAX ripped over 2% for a second consecutive day, maybe looking for a 3rd today. The trend structure is sloppy on the daily, and has become even sloppier with the recent bounce unfolding. No net movement has been recorded for several months, but plenty of volatility has been present as the market continues to search for direction. While we believe the period from the February low to now is part of a corrective phase within the broader downtrend off the 2015 high, the intermediate-term has offered no clean signs of the trend reasserting itself.
The DAX managed at one point to move above the July 4 high yesterday, but on a closing basis the index was unable sustain above. In order for it to fully overcome resistance it needed to cleanly stay above on a daily closing bar basis. Which brings us to today. We are seeing another round of buying pressure push the market well above resistance towards the pivotal 10000/100 area.
The sloppy-looking series of lower lows and lower highs over the past couple of months is turning into a higher low and higher high in the shorter-term.
Its early, with plenty of time for a reversal, but should the DAX hang onto the higher high from July 4 and close well today, then the 10000/100 becomes targeted resistance, and old resistance will become new support (~9730/820).
DAX (Ger30) Daily
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.