DAX 30 & CAC 40 Charts: Eyeing Support Test on Further Weakness
DAX 30/CAC 40 Technical Highlights
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DAX may soon test December uptrend line
The DAX was tossed last week following the ECB meeting, selling off aggressively after trying to trade to its best levels of the year. So far, this has led to downside follow-through in the absence of dip-buyers. There is immediate trend-line support from the June low, but a more important trend-line may soon be tested.
The trend-line rising up from the December trough (significant swing-low) and running under the June low (bottom of largest correction this year) is not too far away. At this time it is also in confluence with the July low at 12172.
This isn’t ‘the’ line-in-the-sand, there really isn’t one to speak of, but the December trend-line does offer an interesting spot for ‘would-be’ longs as well as those looking to bet against this year’s trend. A solid turn off support keeps the trend intact, while a break opens up a path for lower prices.
DAX 30 Daily Chart (December t-line may soon come into play)
CAC back in congestion, at risk or failure
The CAC consolidated for most of the month before gapping higher and reversing at the 2018 high on the ECB meeting. The reversal out of a congestion pattern has the accumulation sequence at risk of leading to a downside failure.
A solid break below 5533 should have the CAC rolling lower towards the December/June trend-line. Like the DAX, it will be a good test of trend. If the bottom of the consolidation pattern holds, then more chop and a possible move higher could eventually develop.
CAC 40 Daily Chart (falling back inside consolidation pattern)
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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.