Technical Analyst, Saxo Bank Group
DAX closed above 13,445 thereby cancelling the top and reversal pattern formed last week. Now the resistance is at 13,565. If DAX closes above that level 13,948 is next.
A close above 13,948 would mean that DAX has reversed its medium-term downtrend.
However, 13,565 could be a struggle. There is divergence building on daily RSI and 200 daily SMA will also provide resistance. However, DAX is in a short-term uptrend as long as the Index does not close below 13,022. The wedge like formation drawn on the chart (two black rising lines) is not yet confirmed. Prices must touch the lines a minimum of 5 times to be confirmed but keep an eye on the lines especially the lower line for a possible breakout. The rising channel on RSI could also be first indication of a possible bear break.
The GER40 cfd/DAX future is testing the resistance at 13,571. It is likely that GER40 will break it but the key question; will it close above? DAX cash Index is key here. If GER40 closes above 13,571 next resistance is at around 13,975.
The GER40 is also testing the upper rising trendline. It is not a strong resistance it is merely just a guideline and could be the upper trendline in a rising wedge.
13,013 is key support. If broken the uptrend is likely to be reversed.
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