DAX 30 Chart Outlook – Test of Important Support Levels Getting Underway
DAX 30 Technical Highlights
- DAX trading near September, March lows
- Macro topping pattern (H&S) maturing
- 12100-area from support to resistance near-term
DAX trading near September, March lows
To start the week the DAX gapped through support surrounding 12100, once again breaking a shelf which held on two occasions since the end of June. The breakdown has a trend-line from March and the low from September 11 in focus, in the vicinity of 11900/865.
A break of near-term support will start to have longer-term implications as the March low is up next as meaningful support. On a break, a lower-low from last month also keeps the generally negative trend intact with its series of lower lows and lower highs.
Any bounce which develops is at risk of failing, with the most potent level of resistance arriving just over 12100. Given the market closed at support on Friday and gapped below it will make it an even more formidable area to content with than usual. If the DAX can muster the strength to that point it will offer a good risk/reward spot for would-be shorts. Right now that is looking like a tall order.
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DAX Daily Chart (Support levels under fire)
Macro topping pattern (H&S) maturing
Looking at the macro-techs for a minute, the broad head-and-shoulders pattern we’ve discussed from time to time, while having lost some of its symmetry on the right side, is still in play. The aforementioned levels of support will first need to be broken before a neckline test can unfold, but should it do so it could be a very important event. We’ll delve into potential outcomes should it become relevant.
DAX Weekly Chart (H&S pattern maturing)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX