DAX 30 & CAC 40 Technical Outlook Turning Towards a Pullback
DAX 30/CAC 40 Technical Highlights
DAX at record high trend-line, top of channel
Trading resumed today after an extended four-day Easter weekend, and so far the market is barely moving. That could change very quickly as an important trend-line stands in the way of the market advancing further from here.
The strong rally in recent weeks puts the market up against the trend-line off the 2018 record high and the top of the channel since the December low. Watch how price action here unfolds as to whether the drive higher wants to continue uninterrupted or at the least we see weakness bring a dip.
Off the low in December pullbacks have developed in February and March, another one is looking likely as both extended conditions and resistance become headwinds. Longs are at growing risk while shorts don’t of course have the upper hand yet, but could soon in the days to come…
DAX Daily Chart (2018 t-line, upper parallel)
CAC extending towards bull market high
The CAC is in a rather extended state here, trading between several peaks created during the middle of last year and the 2018 bull market cycle high. It seems likely a challenge of the 2018 high will bring with it a small dip at the least, but if the DAX breaks above resistance the CAC may do similarly. A turnabout in momentum will bring focus on a pullback towards the trend-line of the late-2018 low.
CAC Daily Chart (extended near 2018 high)
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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.