DAX Xetra (cash index)
The market has struggled to regain the bullish momentum in the past week ever since the sharp downside break that aborted the uptrend channel, and now it seems that the bulls are under pressure again.
A mild recovery phase in recent sessions has never been able to decisively break through an overhead pivot around 12,700 and an early failure lower today suggests that the bears are gathering once more.
The mini uptrend has been broken by an early gap lower (which has been filled) and technicals are shaping up for a corrective move.
Candlesticks in the past two sessions show a run of lower highs and lower lows now forming and a breach of 12,538 would then mean the key near to medium term support at 12,493 comes in to be tested.
The market has dropped back below the old medium term pivot of 12,600 once more and a failure to react back above this into the close today would be an increased concern that the market was ready to pull lower again.
- If 12,493 were breached then this would form a new trend of lower highs and lower lows and a new bear phase would ensue.
For now, though the selling pressure has been contained to an extent this morning and the bears have not gone on a run quite yet.
- The hourly chart shows resistance initially 12,580/12,600 with the band 12,700/12,738 increasingly important now.
- Today’s initial support is the traded low at 12,548 with key support at 12,493 and below there 12,400.
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