DAX/CAC Technical Outlook:
- DAX is trading up against
- CAC is trading is holding well, has less obstacles to rally than the German index
The DAX is trying to make a push above a big level of resistance, the last real threshold standing between it and the record high set before the onset of the coronavirus. The area surrounding 13300 is a formidable one, but given general risk appetite a breakout may be nearing.
A closing print above 13350 should be enough to help propel price through the 13460 high to a gap-fill up to 13579, and then position the DAX to try and take out the record high at 13795. It would certainly be a big achievement considering where the index has come from.
In the event, though, that resistance proves too much and price can’t break higher, an undercut of the recent consolidation pattern (<13004) would put the DAX on its backfoot, at least temporarily.
DAX 30 Daily Chart (trading at big resistance)
While the DAX has been stuck at resistance the CAC has continued to drift higher, an unsurprising event as there hasn’t been any real meaningful levels to keep it from doing so. The grinding price action is at risk of leading to a pullback, making risk/reward generally unappealing at the moment for new longs. However, a breakout in the DAX may bring some momentum to traders looking for the CAC to continue trading higher.
CAC 40 Daily Chart (grinding higher)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
