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DAX & CAC 40 Technical Outlook: Trying to Hold onto Trend Support

DAX & CAC 40 Technical Outlook: Trying to Hold onto Trend Support

Paul Robinson, Strategist

DAX/CAC Technical Highlights:

  • DAX broke wedge formation, but continuing to hold trend support (for now)
  • CAC remaining in channel, as long as it does then bias remains neutral to bullish
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DAX & CAC 40 Technical Outlook: Trying to Hold onto Trend Support

Last week the DAX broke the rising wedge as discussed, but quickly found support at the trend-line rising up from January. The wedge is still in play as potentially leading towards the bottom of the formation around 14800, but trend support may thwart those prospects.

The bounce off the line on Monday was strong, which makes the multi-month slope even more important as we move forward. As long as the line and 15309 (Monday low) hold then the trading bias is neutral to bullish, with a new record high possibly in play soon.

If, however, support breaks then the wedge bias strengthens towards seeing a decline to 14800 and the trend-line from the March 2020 low.

DAX Daily Chart

dax daily chart

DAX Chart by TradingView

The CAC has been stronger than the DAX for a while now, and that theme looks set to continue for the foreseeable future. There is channel and trend-line support in confluence around the Monday low at 6511. A slight lower-low could develop and still be holding trend support.

If the trend-lines hold, then trading bias remains as it has, neutral to bullish. The record high set in 2000 at 6944 still lies ahead as a potential objective to reach in the relatively near future. On the other hand, if trend support breaks then records will have to wait for a later date. Keep a close eye on the DAX and how the wedge/support play out for further cues.

CAC Daily Chart

cac daily chart

CAC 40 Chart by TradingView

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---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.

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