DAX Technical Update: Pushing Back into Overhead Supply
- The DAX reverses and attacks resistance zone
- Bias neutral to lower below resistance a zone and upper parallel
- Keep an eye on the S&P 500 for clues on global market directional bias
The DAX is swinging higher today, after a sizable gap and minor reversal yesterday. Trading conditions continue to favor the day-trader as choppy conditions continue to dominate the market landscape. In Thursday’s piece we noted the importance of resistance in the vicinity of 10440/510 on any bounce which may unfold following the break of this important zone.
As long as the DAX stays below resistance, then the bias remains shifted neutral to lower, and really until it can hurdle above the top-side parallel off the 9/8 peak the tilt will remain to the neutral to bearish side. Overhead supply (sellers) remain.
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Continue to keep an eye on US markets. The S&P 500 looked headed for a breakdown yesterday below the important Feb 11 trend-line and September low, but the S&P recovered and closed the day above key levels. If support can hold help put a bid in, this will help out global markets. A close below the Sep low will be reason to look for a bit of follow-through and likely put pressure on the DAX and other global equity markets.
For now, the focus will be on how the DAX responds to resistance on this bounce and take it from there. Trading conditions aren’t ideal beyond the 1 to 2-day time-frame, but at some point the market will find a direction. Until then we must be nimble in our operations and continue to implement good risk management and discipline.
Our Q4 forecasts are out for FX, commodities, and equity indices; you can check them out in our free trading guides section of the site.
---Written by Paul Robinson, Market Analyst
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DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.