DAX 30 Technical Analysis: Reaction Zone Above 10k in Focus
- DAX made an early day/week push above resistance, but failing so far
- How it treats the resistance zone around 10000/100 is important
- Hourly chart developing rising channel for short-run guidance
This morning, the DAX made a run at moving above the top of the 10000/100 resistance zone, but thus far is failing to maintain above. There is plenty of trading session left for the index to reverse back higher and close above the resistance zone, but in the event it doesn’t we could see the development of a key reversal bar.
If that were to be the case, then the daily time-frame would turn negative and point to a pullback at the least. Old resistance just above 9800 would be the next area of meaningful support on a decline. A strong close above 10100 clears room for a continued advance to the 10250/350 vicinity where varying degrees of trend and horizontal resistance lie.
The 1-hour chart is carving out an ascending channel which traders can use as additional guidance in the short-run. Stay within, then the longs still have the upper hand, albeit with weakening momentum, and shorts won’t find much traction. But a drop below will mark a turn in daily momentum from resistance and likely spur downside momentum.
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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.