DAX 30, CAC 40 Technical Outlook: Levels & Lines to Watch
DAX 30 / CAC 40 Technical Highlights
- DAX 30 up against corona-gap, couple different scenarios
- CAC 40 wedging up, may need some more time before move
DAX 30 up against corona-gap, couple different scenarios
The DAX continues to grind its ways sideways and may continue to do-so for a while longer before reaching a resolution. With the way price action is behaving there are a couple of scenarios that could evolve here. Generally speaking there is nothing overtly bearish, but price is having a difficult time rising above the February 24 coronavirus gap.
One scenario that could unfold is the development of a wedge formation between the bottom of the corona-gap and the trend-line from June. Given the lack of trading activity right now a further tightening of the range looks to be the higher probability scenario. Which way it breaks we shall have to wait and see, but it seems likely the gap up to 13579 will get filled at some point.
If, however, and this is only an “if” the DAX rolls over from here, there could be a head-and-shoulder-ish pattern develop with the high in June as the left shoulder, the head in July, and the right shoulder occurring now. For this to be an active scenario a rollover and breaking of the neckline needs to occur. Looks like a lower delta scenario at the moment, but one we can’t rule it out.
DAX Daily Chart (corona-gap breakthrough or topping sequence?)
CAC 40 wedging up, may need some more time before move
The CAC has been dead money with it moving sideways in a narrowing range since June. The narrowing price action may continue until a defined wedge forms similarly to the DAX. On the top-side, even if price can rise out of the wedge it has its work cut out for it, with the 200-day and June/August 2019 lows in confluence around 5184. Continued range looks likely for now...
CAC 40 Daily Chart (wedge forming)
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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.