DAX Xetra (cash index)
Uncertainty surrounding the near term outlook for the DAX continues to develop as the market continues to range over the past couple of weeks.
The range between the support range 12,547/12,600 and resistance 12,925/12,950 remained intact yesterday as the market again pulled back from the resistance.
However, despite an intraday rebound from 12,781 closing close to the highs of the session, the market has again opened lower today in the wake of a risk off feel to markets following the Fed decision and ahead of the ECB.
How the market reacts to today’s session could now be key for the near term outlook.
As the early session develops, the market is looking to claw back some of the early losses, but the ECB will be a key mover.
- If the market can again reclaim early lost ground then the bulls will be increasingly confident of a break back above 12,925/12,950 which would open 13,040 initially.
However, if the ECB moves hawkish then there could be a strong euro reaction and the DAX could suffer.
- Closing back lower and testing/breaking yesterday’s low at 12,781 would be a negative development that would increase the corrective pressure within the recent range.
There is little to go on for the daily momentum indicators now with a neutral configuration broadly positioned now.
- On the hourly chart, momentum has fallen over again with today’s early move, with support at 12,781 and 12,750 to be tested should the selling pressure increase today.
Essentially, this two week range is becoming ever more important as calling direction over the medium term.
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