DAX & CAC Chart Analysis: Eyeing Breakouts Above Last Year’s Highs
- DAX rises sharply, takes out December high; new highs look next
- CAC is positioned to trade to its best levels since the very end of 2007
- Both indices have long-term top-side trend-lines at new highs, but may only prove to be minor
Last week, when we last looked at the DAX, it looked poised to make good on the Jan 2 reversal-day and continue higher. As the market pushes upward it is looking increasingly likely we will see a new record high sooner rather than later.
The first price level of resistance we had penciled in last week was the December high at 13339, but that was overcome with the help of a gap on Monday. This morning at the time of this writing we are seeing a test of old resistance. But should the DAX trade back beneath, as long as selling doesn’t become heavy the bias will still remain favorable.
The record high at 13525 is only a short distance away. A continued rally to that point without a rest first might find the market too exhausted in the short-term to break out on its initial approach, but with general risk appetite strong and a weak-ish euro, odds favor a climb to a new record soon. Above 13525 lies a top-side trend-line from the 2015 high over November, but may not prove to be much of a hurdle to overcome. Price action at that juncture will be crucial to watch. Beyond there, nothing visible until close to 13900, where the 2007/2015/current t-line lies.
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CAC also rallying with a vengeance, seeking a breakout above 2017 high
After six weeks of choppy trade, the French index is on a straight line to its best levels since the very tail-end of 2007. A breakout above 5536 will do it, and bring a pair of top-side trend-lines into play as resistance. One from 2015 and the other from last year. They may only prove to be minor in nature, broadly speaking, but could present problematic in the short-term. The first level of support clocks in around 5442.
---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.