DAX: Looking to Make Good on Key Reversal Day
- The DAX puts in key reversal day after attempting to break above resistance zone
- Today, seeing some expected selling, moving back below 10k at this time
- Looking to support in the 9700/9800s with follow-through, bearish bias negated above 10165
Yesterday, in our latest commentary regarding the DAX we noted the possibility of a key reversal day developing, but it was early in the morning so we needed to wait through the end of the day to the close to know if this was to be the case. And it was. A ‘pin/doji-like’ reversal bar formed following a pop through the top of the 10000/100 resistance zone we have penciled in as an important inflection point running back to March. The fact the market ran through resistance, but was unable to attract further ownership, then reversed, made the reversal all the more important from where we sit.
Today, we are seeing some selling pressure early, dropping down below 10k at the time of this writing. Further selling may not turn into a rout in the days ahead, but a decline into the low 9800s where the market found resistance in early July is reasonable to conclude. This is a fairly important zone of support given its sponsorship back in May. You can extend the support down to the low 9700s. Let’s call it roughly 9730 to 9812.
This bearish view will come under fire on a daily close above yesterday’s high at 10165. At which time a move to the 10250/350 region would gain traction.
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.