DAX/CAC Technical Highlights:
DAX 40 and CAC 40 Technical Outlook: In Face-off with Resistance
After a massive recovery the DAX is finally running into an area of resistance that it is finding formidable to overcome. The area from just over 14800 to 15100 is a big one, and with the market reversing the other day at big resistance, a retracement, or sideways period at best, is to be expected.
There is short-term support at the top of a range created mid-month at 14553. The DAX may look to hold this spot and retest the aforementioned resistance zone, but given how far we have come in such a short period of time we may see more downside towards 14109 or worse.
For now, the trading outlook is not favorable for longs given overhead resistance and overbought conditions. It could become a bit of a choppy market with a downward bias. Another failure up around 14800/900 could offer up a good opportunity for would-be shorts to play this scenario.
DAX Daily Chart
The CAC snuck above horizontal resistance dating to December at 6747, but quickly found it difficult to climb above the 200-day moving average only 30 handles higher. The smallish reversal lower could continue in the near-term.
There is some support around 6655 that could keep price bobbling between support and resistance. It is seen as taking a little time of digestion before the CAC can reassert itself towards higher levels. If we do see the recent high at 6829 taken out, watch the trend-line off the Jan high.
Overall, though, the outlook for the CAC is naturally similar to that of the DAX, but the CAC remains a bit more bullish in the absence of major resistance, while the DAX remains seen as the better short given its major levels to overcome.
CAC Daily Chart
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX
