DAX 30 & CAC 40 Technical Outlook: Pullback Constructive So Far
DAX 30/CAC 40 Technical Highlights
- DAX pulling back from near yearly high, orderly so far
- CAC on similar course as its German counterpart
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DAX pulling back from near yearly high, orderly so far
The DAX 30 notched a new intra-day high by a few points last week, but has since been retreating. Selling interest has been relatively light with the pullback developing in an orderly manner. This suggests that there is likely to be another attempt to trade higher soon.
There is price support via the June 11 swing-high at 12111, followed by a trend-line from the June 3 low just beneath there. Dialing in closer to the hourly time-frame you can see even better the near confluence between price and trend-line.
Between benign price action and support the current pullback appears set up would-be longs for a good risk/reward entry. A double-top of the May high can’t be ruled out, but until we see aggressive downside price action it is the lower probability scenario.
For now, focused on the top-side. A break above 12438 could have the next level of resistance in focus, a minor swing-high from last year at 12597.
DAX 30 Daily Chart (near new year high)
DAX 30 Hourly Chart (solid upward channel structure)
CAC on similar course as its German counterpart
Naturally the CAC is highly correlated to the DAX, but the near-term technical structures are nearly identical as far as the upward channels are concerned. The lower parallel clocks in under 5500 and if touched here soon it could traders a decent line to lean against from the long-side.
The reversal candle on Friday is a little concerning, but overall upward forces remain intact. The short-term trading bias remains to the upside. If the support line breaks and momentum accelerates then this could change to neutral to bearish.
CAC 40 Daily Chart (year high could soon be next)
CAC 40 Hourly Chart (solid upward channel)
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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.