DAX/CAC Technical Outlook:
- DAX filled coronavirus gap, heading towards early-year record high
- CAC lagging behind but should continue to trade higher
The DAX finally filled the February 21 coronavirus gap at 13579. The recent consolidation pattern suggested we would see a move higher, now we will see if new record highs can soon be recorded. A breakout above 13795 is needed to achieve a new record.
Looking beyond record highs it is difficult to say how high the DAX could rise with no actual resistance in sight. We will want to keep an eye on not only price action in Europe, but also in the U.S., which is generally leading the way.
On the downside, it will take a bit of a hit and failure to recover to turn the outlook bearish. For now, continuing to run with a bullish bias as the end of the year approaches and trends remain strong.
DAX 30 Daily Chart (looking towards record highs)
The CAC 40 isn’t propelling higher at the moment like the DAX, but the sideways move should set up for higher levels at some point. The lag behind the German benchmark, if it becomes too pronounced, may set the French index up as a go-to short candidate later-on. For now, though, maintaining a bullish stance.
CAC 40 Daily Chart (consolidation continues)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
