DAX Xetra (cash index)
The bulls have failed to build on a decisive positive daily candlestick, but there is still a positive outlook on the DAX and weakness remains a chance to buy.
Another break to multi-month highs yesterday took the market into the 11,725/11,865 key long term resistance band of the old 2017/2018 floor which is now overhead supply.
This means that this is a key crossroads moment for the DAX.
Momentum indicators are set up positively even though there has been a tick lower on RSI and Stochastics from their strong configuration.
There is an uptrend of the past five weeks at 11,620 today and is a basis of support for any slip back.
- The intraday move lower gapped below the 11,725 pivot this morning, but there is near term support between 11,625/11,677 as a buy zone.
This is an unwinding move in the trend higher and is still likely to be seen as a buying opportunity.
The main caveat to this would be the FOMC decision tonight which could change sentiment on a hawkish surprise, however in the absence of this there is a continued recovery outlook on the DAX.
- With initial resistance at 11,772 and yesterday’s high of 11,823 a close above 11,865 would be the key bullish breakout and open the next resistance around 12,450.
