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DAX Getting Bulled Up for Another Leg Higher

DAX Getting Bulled Up for Another Leg Higher

What’s inside:

  • DAX choppy, but generally bullish
  • Ascending wedge on the build, looking
  • CAC 40 descending wedge will soon break, too

What’s driving the DAX, the Euro? Find out in our market forecasts.

The DAX continues to trade in choppy fashion when looking out over the past month, but generally the bias is higher. Risk appetite, globally, is in fairly good health. Friday’s disruption in the U.S. (primarily hitting the Nasdaq) is looking more and more like a one-off event.

The DAX is doing its best to trade to new highs this week, but if it can’t break on through here soon a wedge could continue to build – ascending wedge. One could make the case it already has fully formed, but one more ‘jab step’ to the lower trend-line rising up from the 4/24 gap would make for a more complete pattern. At any rate, the implications are bullish, with the first target arriving at the February top-side slope. Depending on the timing when (if) achieved, it arrives between 12980/13020. A break of the 4/24 gap trend-line would undermine a bullish outlook and quickly bring the November trend-line or worse into play.

DAX: Daily

The other day we were looking at the CAC 40 given the technically sound price pattern it’s currently developing – descending wedge. It’s becoming a nice-looking formation and should soon lead to a break. In terms of big price moves, so goes the DAX goes the CAC, vice versa. Magnitude often differs, but the correlation is consistently strong. With that in mind, the CAC is closing in a breakout – top or bottom side? Risk trends and the DAX suggest up…

CAC 40: Daily

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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.