DAX/CAC Technical Highlights:
DAX and CAC Technical Outlook: Weakness is Bringing Support in Focus
The DAX has been weak of late, especially yesterday. This has the 200-day moving average in focus as a support level to watch. Previously, when it was hit towards the end of last month it didn’t hold much water, but a lot of volatility did occur as to be expected around that particular threshold.
As volatile price action around the widely-watched moving average is common, it could very well happen again here as the market outlook turns a bit dicey. We could see a jet through the 200 before reversing higher. If the DAX gets separation from the 200 on the downside, then look for the 15101/15015 area to get tested.
If the DAX can turn up from here then the first level to watch on the top-side is 15834, followed by a gap-fill up to 15917. Beyond there nothing highly visible stands in the way until the record high at 16290.
From a tactical standpoint, price action around the 200 isn’t yet triggering any kind of conviction either way; sitting tight until the picture becomes clearer.
DAX Daily Chart
The CAC hasn’t been as weak as the DAX, and on that it is seen as having a more positive outlook should risk trends here shortly start to firm up and turn higher. The CAC isn’t anywhere near the 200-day moving average, but still has a nice level of support just below.
The trend-line running up from October 2020 was thoroughly tested a few weeks back and held well. This cements the line as an important one that should help keep the market buoyed in the event it is tested. A break below would be a reason for concern and to look for lower levels ahead.
CAC Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
