DAX 30 / CAC 40 Technical Highlights
- DAX 30 still vulnerable after breakdown from technical formation
- CAC 40 broke wedge but held important line of support
- The bounces could roll over, or morph in to rallies, or nothing at all
DAX 30 still vulnerable after breakdown from technical formation
On the 21st the DAX broke hard by over 4% out of a wedged up price sequence that suggested that we would see more follow-through. But it wasn’t long after that a bounce developed, however, it doesn’t mean the index is in the clear.
It is possible the bounce may have concluded with Monday’s big up day and that price rolling over the past couple of days could start to pick up some momentum. A break above 12873 would put this idea to rest, at least temporarily, while a dive back towards recent lows would strengthen a bearish bias.
A break below 12341 will have the 200-day in play down to 12179. It is entirely possible that the index makes headway in neither direction, as even though we had a strong breakdown price is still stuck at the same levels it was at in early June. It may take some time to gain clarity…
DAX Daily Chart (only a bounce?)
CAC 40 broke wedge but held important line of support
The CAC broke from a wedge formation, but the confirmation we had been looking for never came to pass as the 4691 level was held on a daily closing basis. A daily close below 4666 should have momentum picking up as key support is left behind. In the event that support continues to hold there is much work on the top-side to be done as the general trend/tone isn’t very favorable.
CAC 40 Daily Chart (held support just under 4700)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
