DAX 30 & CAC 40 Technical Outlook: Struggling at Strong Resistance
DAX & CAC Technical Outlook
- DAX trading up near the January 2018 trend-line
- CAC treading around multi-year highs, but can it get through?
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DAX trading up near the January 2018 trend-line
The DAX is currently trading around the trend-line running down from the January 2018 high. The German benchmark turned down from the trend-line on September 20th, and with other connecting points running over recently (July), it’s an important line of resistance to watch in the very near-term.
To breach the line will require a close above the trend-line and 12491. As long as price stays capped by resistance the outlook will remain neutral to bearish. It’s not the tightest channel off the August low, but nevertheless the DAX is trading outside of it which suggests a slight fracturing in momentum.
Looking the big-picture, what happens in the near-term could impact the longer-term. The head-and-shoulders (H&S) scenario is still very much alive, with the right shoulder possibly coming here soon at the Jan ’18 trend-line we could see a strong turn down.
The H&S set-up is only a scenario, but one to continue to monitor as we head down the home stretch of 2019.
DAX 30 Daily Chart (Jan ’18 t-line resistance)
CAC treading around multi-year highs, but can it get through?
The CAC is in a battle with the highs from May 2018 and upper parallel from April. There was a recent breakout above the 2018 high, but that was quickly erased. This keeps a bit of pressure on the CAC to break free. In the short-term there is a small H&S pattern to consider, it’s been building since Sep 12. If that triggers and the DAX turns down from its even bigger line of resistance, then look for the French market to follow suit.
CAC 40 Daily Chart (small H&S around 2018 highs)
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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.