News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Oil - US Crude
Bullish
Wall Street
Mixed
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Gold Price Forecast: Dovish FOMC Could Underpin Bullion Ahead of NFP - https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/11/27/Gold-Price-Forecast-Dovish-FOMC-Could-Underpin-Bullion-Ahead-of-NFP.html?CHID=9&QPID=917708&utm_source=Twitter&utm_medium=Moss&utm_campaign=twr #Gold #XAUUSD $GOLD $GLD https://t.co/N9ChZOqSdy
  • Forex Update: As of 21:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.42% 🇦🇺AUD: 0.35% 🇳🇿NZD: 0.30% 🇨🇦CAD: 0.20% 🇯🇵JPY: 0.16% 🇬🇧GBP: -0.33% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/4uyJxc09OH
  • Commodities Update: As of 21:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/pbfmvnsvuu
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NL3bVphnYH
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.64% Germany 30: 0.04% US 500: 0.00% Wall Street: 0.00% France 40: -0.02% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/uZ1HjcIJ4q
  • GBP/USD continues to fail around the 1.3400 level and is unlikely to make a confirmed break higher ahead of any trade talk confirmation. Get your $GBPUSD technical analysis from @nickcawley1 here:https://t.co/EWLFXK1q3q https://t.co/4XSSNxobMo
  • The Gold price sell-off has broken below key technical barriers and leaves the outlook for XAU/USD weighted to the downside heading into the close of the month. Get your $XAUUSD technical analysis from @MBForex here:https://t.co/3YLcAFlr5f https://t.co/1uFb9UkDvV
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.48% Gold: -1.28% Silver: -2.80% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/OvThGydQBs
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 93.65%, while traders in France 40 are at opposite extremes with 78.02%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/Yq6wLxhblV
  • Vaccine Optimism Sparks 28% Increase in Oil Prices. Get your #crudeoil market update from @JMcQueenFX here:https://t.co/F3AlSkniXk https://t.co/qevY4Gh6o9
DAX 30, CAC 40 Technical Outlook Worsens with Support Under Siege

DAX 30, CAC 40 Technical Outlook Worsens with Support Under Siege

2020-10-26 11:00:00
Paul Robinson, Strategist
Share:

DAX/CAC Technical Outlook:

  • DAX neckline of H&S pattern being tested
  • CAC not as clear but will go the way of the DAX
Advertisement

The DAX is getting beat up to the tune of 2% at the time of this writing, with a large portion of the losses attributed to SAP losing nearly 20% of its value in today’s trade on earnings. This down-move in the index is putting significant support to the test.

In recent weeks we have been discussing the possibility of a head-and-shoulders (H&S) pattern, and with a little more weakness it will have fully completed and validated it by having price fall through the neckline.

The DAX is currently trading right around the neckline and just above the July low and 200-day moving average. A decline below both the neckline and the 200-day at 12133 should have the DAX rolling downhill.

But to get bearish momentum really cranked up, we will likely need the leading U.S. stock market to roll over too before we get full risk-off in financial markets. The height of the H&S formation implies the DAX could move to 11k, or worse.

Again, though, before getting too bearish we need to see the neckline and 200-day break, otherwise we may see it hold and continue to push the DAX further into a trading range. So while the H&S pattern is very near completion it isn’t a valid pattern until it triggers, a fact that gets lost on many when looking at these patterns. Support is support until it isn’t.

Equities Forecast
Equities Forecast
Recommended by Paul Robinson
Check out the Q4Equities Forecast
Get My Guide

DAX 30 Daily Chart (Support being challenged)

DAX 30 daily chart

DAX Chart by TradingView

The CAC outlook isn’t as clear as it is with the DAX, having been stuck in a range for many months. In the big picture it is certainly much weaker than many other major global markets as it has yet to come near the year highs made before the coronavirus knocked markets over.

The big level on the downside is just under 4700. The level dates back to the April high, where thereafter resistance then became support in June and September. Stay above and the range continues, break below and it appears likely it would be following the DAX as it too likely breaks its own major level of support.

CAC 40 Daily Chart (continue to watch support just below 4700)

CAC 40 daily chart

CAC 40 Chart by TradingView

Forex Trader Resources

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---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.

DISCLOSURES