Indices Highlights:
- DAX 30 still building ascending wedge pattern
- CAC 40 treading on trend-line, could break down soon
- FTSE 100 starting to roll over, could test low soon
DAX 30 still building ascending wedge pattern
The DAX continues to hold up, but is also working on a potentially bearish ascending wedge formation. It’s been the strongest of the major European averages, so if it starts to roll over the others may do-s0 at a faster rate (looking at you, CAC 40).
The ascending wedge pattern won’t fully trigger until it develops a bit more and price crosses the rising underside trend-line. A breakdown would have recent gaps in mind to be filled; 10069 and 9527 would be the first up.
But for now, as long as the DAX stays above the lower trend-line then the trend still remains pointed upward in the near-term, and could still bring gap-fills over 11k into play on further strength. A resolution one way or another appears to be nearing.
DAX Daily Chart (ascending wedge forming)
CAC 40 treading on trend-line, could break down soon
The CAC is running weaker than the DAX right now, having still yet been able to climb above the March high. With that in mind, should global markets come under pressure here soon, the CAC is likely to break at a faster rate than other indices. A break of the rising trend-line off last month’s low will have 4143 quickly into focus, but a retest of the capitulation lows at 3632 could very well be in order.
CAC 40 Daily Chart (teetering on trend-line break)
FTSE 100 starting to roll over, could test low soon
The FTSE 100 has broken the trend-line rising up from last month, and on that it is positioned even weaker than the CAC. The 5351 swing-low may be next up, but a retest of the 4898 low may soon be in order. It is possible a higher-low forms here, still, but price needs to turn higher soon else run the risk of seeing the FTSE sell off.
FTSE 100 Daily Chart (at risk of retest soon)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
