DAX Xetra (cash index)
A recovery from the range low has failed to kick on as the risk recovery has failed to substantially follow through into the DAX.
The rebound yesterday closed only marginally higher and formed a negative candlestick across the session with a close of 35 ticks below the open.
There is still a gap open at 12,780 which needs to be filled, however the reluctance to back a rebound is a concern for the bulls as the market continues to trade close to the key neckline support around 12,600 which has been the basis of the range in recent weeks.
Within this, momentum indicators are hovering around key levels and although the RSI is holding above 40, the MACD lines tracking lower are threatening to go below neutral and could be a signal for a downside break of 12,600 if the bulls cannot substantially pull higher in the coming days.
A close below 12,600 would be a key development now.
- Yesterday’s high at 12,760 adds to resistance overhead, with today’s initial high at 12,720.
On the hourly chart the RSI has already started to track back lower again below 40 and the Stochastics also reflect the initial deterioration.
- The bulls are really struggling for traction and the risk of a break below 12,600 is growing.
- The current spike low for June is 12,547.
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