DAX Technical Outlook: Top-side Trend-lines in Focus as Support
- DAX started the week higher, but closed the gap
- Trading becoming difficult in low-volatility environment, still running with bullish bias
- Key levels outlined
The DAX opened the week higher by over 50 points from Friday’s close, but has since given back those gains at the time of this writing. The jump higher this morning came from a multi-day consolidation which defined last week’s trading after the small Macron ‘gap-n-trap’ last Monday.
We’ve been running with a bullish bias for a while now, but admittedly it’s becoming increasingly difficult with prices becoming extended and generally choppy price action dominating trade. Volatility is low and hasn’t been very trader-friendly – the ‘buy and hold’ crowd is happy, though.
The focus on short-term support remains at the February top-side trend-line. The market held it twice last week – Monday/Thursday; it may not be long before another test comes (~12715/20). Should it break, the next focus comes at the August top-side trend-line (conviction is lower that this one will be as supportive as the Feb line). In the event both top-side trend-lines don’t hold a move towards the old record highs beneath 12400 could be in order. But for now, until we see a strong push lower and support broken, we’ll continue to respect the trend and look to weakness as more likely to be bought than accelerated with more selling.
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---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.