DAX Chart Outlook – Can Price Stay Above Resistance?
DAX Technical Highlights
- DAX trading above the 12100-area, an important threshold
- Today’s closing print viewed as important
DAX trading above the 12100-area, an important threshold
The week before last the DAX broke fairly significant support just around the 12100-level, but found a low just a few days later. This has the level once viewed as support now a level of resistance. It’s come into play each of the past four sessions, with no success so far in recapturing it (but trying now).
Should we see the market sustain above resistance on a daily closing basis, then momentum on the break could carry it higher. It will still be an uphill battle, though, as the trend during recent months stays negative.
The key is whether the market can close above 12100 or not. An intra-day move could see price traverse well above resistance (like today) only to have a closing print back below. In this event, the rejection to maintain above would further solidify resistance.
If the market sinks back below by today’s close, then the outlook will turn negative should momentum begin to take the DAX lower with force. Looking lower, there is minor at 12040, 11952, and then the more significant level at the monthly low 11865.
Tactically speaking, today could important. A reversal on another attempt to trade above resistance could post a bearish key-reversal bar, which would be viewed as a sign the market wants to trade lower, and thus potentially give shorts the upper hand. Conversely, a strong close today (i.e. around current levels or better) is seen as keeping the recent upward bias intact for longs.
For market sentiment and to learn more about how to use it in your analysis, check out the IG Client Sentiment page.
DAX Daily Chart (Above resistance, but can it hold?)
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---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.