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Technical Update - DAX rejected at key resistance. EuroStoxx50 double bottom pattern struggling to release upside potential

Equities 3 minutes to read
Kim Cramer Larsson

Technical Analyst, Saxo Bank

DAX seems to be rejected once again at the 12,927 resistance and 0.618 retracement. DAX must close above 12,931 for further upside. RSI is still showing negative sentiment a close above 60 threshold is needed for the to change to positive.
If those two scenarios play out DAX is likely to test the falling black trendline the 0.786 retracement at around 13,200.
If DAX cannot close above 12,931 and drops back below 12,548 bear trend is set to resume. That scenario will be confirmed if the RSI closes below its lower rising trendline
Below both DAX cash Index and the GER40 cfd/Future Index


DAX d 24oct
Source: Saxo Group
GER40 d 24oct
Source: Saxo Group

After forming a Double Bottom pattern EuroStoxx50 is hovering around its falling trendline and testing the 0.618 retracement of the September sell-off. A pattern that has potential to around 3,683. However, there seems to be overhead resistance around current levels with the 55 and 100 SMA’s coming down. The provide resistance and indicate underlying bearish trend.
RSI also still showing negative sentiment and has no divergence. IF RSI fails to close above 60 and gets rejected bear trend on the EuroSToxx50 is likely to resume.
If EuroStoxx50 closes below 3,422 the bear trend is to resume

EU50 d 24oct
Source: Saxo Group
Note: The author of this article is at the time of writing holding a short position in GER40


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