DAX 30 & CAC 40 Charts – Outlook Bearish in the Near-term and Longer
DAX 30/ CAC 40 Technical Highlights
- DAX traded up very near important neckline resistance
- CAC 40 gap nearly filled already, more downside near-term
- Outlook is broadly bearish, but may be somewhat neutral through year-end
DAX traded up near important neckline resistance
Yesterday’s gap started the DAX out for the week very near the neckline of the long-term head-and-shoulders topping forming. Weakness has a gap-fill down to 11257 in focus in the near-term, with not far below there the 2011 trend-line I’ve been noting lately as the last major line of support before the DAX should pick up momentum from the H&S topping pattern.
While the upside looks limited with neckline resistance, so does the downside with the trend-line as support. As we head through the final weeks of the year the market may not find momentum to make a sustainable move in either direction, especially with big barriers on both sides. For now, risk is skewed lower in the near-term and strongly lower once the calendar flips.
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DAX Daily Chart (Neckline resistance, trend-line support)
DAX Weekly Chart (Head-and-shoulders to lead to big move lower next year)
CAC 40 gap nearly filled already, more downside near-term
Yesterday’s decline in the CAC once the market opened took back a majority of the gap and today has it even closer to filling already. As longs as the CAC stays below 5115 (yesterday’s high), then look for more downside in the near-term towards the 4920/4890-area. Congestion and possibly a descending wedge are in the works through the end of the month.
CAC 40 Daily Chart (Bearish below 5115)
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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.