DAX/CAC Technical Highlights:
- DAX trading around the January high, treading water for now
- CAC doing similar to DAX, consolidation before breakout would be good
The DAX gapped higher on Monday to a new record high, but then pulled off modestly to close back below the 14131 level. Generally speaking, the price action is constructive here with the pullback only gradual in nature.
Should we see a bit more selling come in, look to the late-October trend-line as a potential line of support. A decline as long as it isn’t done with momentum could turn out to be a good thing as a healthy minor correction before resuming higher.
If the DAX can continue higher there isn’t any real meaningful levels of resistance. There is a trend-line, also from October, that could act as an upside buffer. But given it is running in the direction of the trend it isn’t viewed as highly meaningful.
For now, continuing to run with a long bias until pervasive price action suggests it prudent to do otherwise.
DAX Daily Chart (slight pullback from Jan high)
The CAC is trading up against the Jan high, and with it extended off the late Jan low it could perhaps use a bit of a breather before attempting to extend the rally. As with the DAX, there too lies the late-October trend-line to act as support should modest selling set in.
Looking higher, on a breakout the yet-to-be-filled Coronavirus gap awaits. It arrives at 5875 and runs up to 6031 to be filled, just below the 2020 high at 6111. It seems as some juncture we will see this get filled.
CAC Daily Chart (still looking for Corona gap-fill)
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
