DAX 30/CAC 40 Technical Highlights
- DAX has resistance ahead, but year high may be here soon
- CAC lagging behind, if Europe rally stalls it is set up to lead lower
DAX has resistance ahead, but year high may be here soon
The DAX 30 posted an impressive bottom last week and has been in rally mode most of the time since. The first point of resistance, the upper parallel off the May 3 high, proved to be of little impact. The German benchmark is now trying to gear up and reclaim the broken trend-line off the December low.
Continued strength beyond the broken trend-line will have resistance around the 12310-mark in play, which is effectively a failed attempt to trade into the May 6 gap. A small pullback or pause around there may be in the works and a good thing for those looking to play for a gap-fill and move to the highest levels of the year.
The May 6 gap-fill will also constitute trade to the yearly high at 12412 on a closing basis. A move beyond 12435 is needed for a fresh intra-day yearly high.
For now, the benefit of the doubt is with the long-side as short-term momentum continues to remain favorable for higher prices. Should we see a sudden, swift turnabout in momentum then a reassessment will be needed.
DAX 30 Daily Chart (resistance to watch)
CAC lagging behind, if Europe rally stalls it is set up to lead lower
The CAC 40 is trading towards its first level of resistance at 5450 since breaking the trend-line since April. Shortly beyond the May 17 peak is the May 6 gap from 5489 up to 5548, followed by the year high at 5601. The CAC is lagging behind the DAX, and as such if Europe turns down with force it is set up to lead lower. For now, the trading bias is higher until such price action suggests we need to switch gears.
CAC 40 Daily Chart (levels to watch)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX