Technical Update - DAX/GER40 in short-term uptrend. Can it break key resistance or is it running out of steam?
Kim Cramer Larsson
Technical Analyst, Saxo Bank
After closing above the short-term falling trendline DAX took off yesterday closing at the 0.382 retracement confirming short-term uptrend (higher highs and higher lows). DAX is set to test the resistance at 13,565. However, DAX seems to have found some resistance here at 13,378 which is need to break before having a go at the Gap resistance area.
The Gap resistance area 13,565-13,762 is quite strong, however. Especially the lower resistance at 13,565.
Can DAX close the gap or not, is the key question. If it closes the gap i.e. closing above 13,762, higher levels towards 14,162 and maybe 14,700 is in the cards. If it cannot close the gap, downtrend is likely to resume. Since RSI hasn’t closed above 60 it is still showing negative sentiment.
GER40 cfd/DAX future seems to get rejected at the 0.764 retracement. RSI has been rejected at 60 – for now – but could have another go over the next few days. If requires GER40 takes out today high at 13,450, however. If it does GER40 will most likely test the strong resistance at 13,675.
If it fails, as it seems at the time of writing, we could see a few days where GER40 drops back to around 13K. Joker is ECB and rate hike decision due this week which is likely to create volatility.
Latest Market Insights
Quarterly Outlook Q3 2022: The Runaway Train
- Central banks' attempts to kill inflation is a paradigm shift, which could end in a deep recession.
Tangible assets and profitable growth are the winnersWith US equities officially in a bear market, the big question is where and when is the bottom in the current drawdown?
Understanding the lack of investment appetite among oil majorsThe everything rally seen in recent quarters has become more uneven, as its strength is driven by commodities in short supply.
The pressure is on as the wind leaves the sailsWith cryptocurrencies in sharp decline, are we entering a crypto winter or is the bear market a healthy clean-up of the crypto space?
Why the Fed can never catch up and what turns the US dollar lower?Many other central banks are set to eventually outpace the Fed in hiking rates, taking their real interest rates to levels higher than the Fed will achieve.
Bank of Japan: Swimming against the tideThe Japanese economy has gone from the age of deflation to rapidly rising prices in no time, leaving the Bank of Japan in a pickle.
Green transformation detour and bear market hibernationWith the impending risk of global econonomic derailment, we share the five things investors need to consider in this new half year.
Crisis redux for the eurozone?Whether there's going to be a recession in Europe or not, the path towards a stable economy will be agonizing.
Technical Outlook: Gold, Oil and a remarkable multi-decade perspective on EquitiesThe Nasdaq bubble pattern, USDJPY resistance, crude oil uptrend losing steam and the technical outlook for USD.
China: the train of new development paradigm left the station two years agoChina is transiting to a new development paradigm, as they are hit by deteriorating terms of trade, a slower global economy and an uncertain future while continuing attempts to contain the pandemic.