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DAX 30/CAC 40 Technical Highlights

  • DAX testing the important 2011 trend-line
  • CAC falling short of eyed price resistance

To see our intermediate fundamental and technical outlook for the DAX & Euro, check out the DailyFX Q1 Forecasts.

DAX testing the important 2011 trend-line

Last week, when I last looked at the DAX the general outlook was for it to push up to the 2011 trend-line before possibly running into trouble. With the German benchmark at this important threshold weakness, which has already begun to creep in, is expected.

Ideally, we see another drive up and more thoroughly test the long-term trend-line, with an eventual strong rejection to signal a price decline. But even without such an event, weakness still looks more probable to sustain than strength.

The first area of support clocks in just under the 11k-mark, where price support from December found a bit of resistance and forced a period of consolidation prior to last week’s shot higher into the 2011 trend-line. The bottom of the consolidation period runs around 10800.

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 (2011 t-line, 11000/10800 support)

DAX daily chart, '11 t-line, 11k/10800 support

CAC falling short of eyed price resistance

Last week, the CAC made a push towards resistance from Oct-Dec but fell shy of the zone. A short-lived drive into 4896/944 could make for a thoroughly testing, and we may yet see that. But if the DAX declines from here then so will the CAC in all likelihood. On weakness, support comes in around 4730.

CAC Daily Chart (Shy of resistance zone)

CAC daily chart, shy of resistance

Want to learn more about trading the DAX? Check out ‘How to Trade the DAX’, and join me weekly for technical updates in the Indices and Commodities webinar.

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