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CFDs and forex spot transactions are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor lose money when trading CFDs and/or forex spot with this provider. 0.52% of retail clients trading in leveraged products experience a negative account balance after a stop out occurred. You should consider whether you understand how CFDs, forex spot transactions or any of our other products work and whether you can afford to take high risk of losing your money.
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Technical Update - Closing gaps but DAX and GER40 are facing strong resistance Technical Update - Closing gaps but DAX and GER40 are facing strong resistance Technical Update - Closing gaps but DAX and GER40 are facing strong resistance

Technical Update - Closing gaps but DAX and GER40 are facing strong resistance

Equities 2 minutes to read
KCL
Kim Cramer Larsson

Technical Analyst, Saxo Bank

DAX closed the gap once again but is facing strong resistance. Bear trend can soon resume. GER40 inches away from key resistance

 



With the forming of a Bullish Engulfing pattern last week indications of a possible bottom and reversal was there. However, DAX didn’t seem to be able to keep the upside momentum with the Index sliding back below the gap. But that changed yesterday. Helped by heavy buying in US equities DAX closed the gap from last week and is back now back above the gap.  

Next key resistance for DAX is 12,674. If DAX fails to close above that level the Index is likely to resume down trend.
If DAX manages to close above 12,674 there is strong resistance around the 0.618 retracement of the September downtrend at around 12,915. 55 daily SMA is coming down indicating underlying bearish sentiment and will provide resistance

 

Source for all charts and data in this article: Saxo Group

The GER40 cfd/DAX future dipped below key support at 16,707 bouncing back above the 0.618 retracement of the 2020 trough to September 2021 peak.
To build on the rebound momentum GER40 needs to break above 12,690 for further upside momentum. If it manages to do that there is strong resistance at around 12,897-12,938.
If the future slides back below Thursday low at 11,933 bear trend is to resume and last week’s low at 11,808 is likely to be taken out.

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