DAX Technical Analysis – Through Price Resistance, Challenging 200-Day
DAX Technical Highlights:
- DAX cleared through 12550/600 resistance
- Challenging 200-day MA; gaps, t-line ahead
- Bullishness should prevail in the short-term
On Tuesday, the DAX cleared through the zone of resistance in the 12550/600 area, furthering the breakout in yesterday’s trade. This has the 200-day and gap-fills in focus. There are two gaps which could soon come into play; one at 12834 from 6/18 and the other at 13010 from 6/15.
The second gap resides roughly around the trend-line off the record high. This trend-line has a fair amount of significance given it has two key connecting points from May and then June. A rally to that point would likely face opposition and be a good spot to look for stalling momentum.
Looking lower on a dip, the ‘old resistance becomes new support’ rule applies here. Any dip down into the 12600/550 region and hold will be viewed as a potential backstop for would-be longs. A break through and we would need to readjust and perhaps downgrade the importance of this price band dating back to February.
Broadly speaking, the potential for a ‘head-and-shoulders’ top dating back to June of last year is still intact. However, if the DAX starts to really grow legs and run past the trend-line and then above the May high, this scenario would be in serious jeopardy as symmetry of the pattern would be considerably dented. We’ll discuss this big-picture scenario at a later time should it become relevant.
For now, focus is on recently secured support and obstacles which lie ahead. It looks like the DAX wants to ride a bit higher for now, then perhaps roll over once the summer rally has run its course.
Check out this guide to learn 4 core tenets for Building Confidence in Trading.
DAX Daily Chart
For live weekly updates on the DAX and other indices, join me live on Tuesdays for ‘Indices and Commodities for the Active Trader’.
Forex & CFD Trader Resources
Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.
---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.