DAX 30 & CAC 40 Technical Outlook Remains Weak
DAX 30/CAC 40 Technical Highlights
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DAX not garnering much buying interest off support
The DAX 30 has done little in the way to inspire buyers off the 200-day MA, with the bounce failing after only a couple of days. That brings us to today where a probe below the monthly low took place this morning.
At this juncture, the “bullish” scenario is for a bounce to keep the DAX generally moving sideways – a congestion pattern to form as a result. This is seen then as eventually leading to another leg lower towards the March low right around 11300 or worse.
The head-and-shoulders scenario discussed the other day could form if this plays out, but will require some good horizontal price action to do so in order to make for a solid right shoulder. In any event, it looks like lower levels are to come one way or another. This should keep the path of least resistance in favor of shorts on bounces.
DAX 30 Daily Chart (Not much bounce off support)
CAC a little stronger, but not much
The CAC isn’t quite as weak as the DAX, but looks to be in trouble nevertheless. There may be some more retracement of the down-move from the July high, with the recent low at 5226 in confluence with the 200-day MA as a short-term line-in-the-sand. Below there the June low will come into focus as the next level of support.
CAC 40 Daily Chart (watch 200-day, recent low)
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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.