DAX Technical Outlook: Bullishly Quiet
- DAX quiet after Monday’s French election-induced explosion
- Support not far below in the form of prior highs, trend-line
- Resistance in form of top-side t-lines to watch on next push higher
Since the big gap-and-rip on Monday, European markets have been calm, with the DAX carving out ‘holiday-trading-like’ ranges the past couple of trading sessions. So far, the fact it has held onto those gains and gone into a quiet phase suggests sellers aren’t too eager at this juncture. A gradual pullback towards the 12375/12391 will be the first test of old highs and a logical spot to look for the market to hold.
There is the December trend-line to keep an eye on should we see a dip below the beforementioned levels. It arrives at this time at around 12330. The line was breached not long before the pop this week, but could be an angle the market is still working off of; we’ll know if it is in event of a dip down to it and buyers show up (that’s how we validate any level of support/resistance we identify – does the market respond or not?)
Looking higher: In Monday’s piece, we said while the DAX was headed for new record highs there still lies resistance not too far ahead. A pair of top-side trend-lines sit in the way; the nearest line, which was very nearly tagged on Tuesday, extends across peaks starting back in August 2016, and the second line crosses over highs created since the latter part of February. These lines aren’t viewed as significant resistance, but nevertheless could act as speed bumps.
All-in-all, the DAX looks solid up here. A little time and some slightly downward probing of support levels should do the market good before rising to new heights.
Heads up: ECB rate decision in just a few hours from the time of this writing. Little expectations for any fireworks from the meeting, but as per usual wrangle risk in anticipation of the unexpected. Economic calendar.
Created with TradingView
Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of upcoming live events.
---Written by Paul Robinson, Market Analyst
You can receive Paul’s analysis directly via email by signing up here.
You can follow Paul on Twitter at @PaulRobinonFX.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.