Technical Analyst, Saxo Bank Group
EuroStoxx50/EU50 and DAX/GER40 have bounced strongly and is now testing key resistance levels. A close above will confirm corrections are over and uptrends resumed with potential to higher highs
EuroStoxx 50 has bounced from support at around 4,888, close to testing the 0.618 retracement and resistance at around 5,034. A daily close above 5,034 and an RSI close back above the 60 threshold will confirm the uptrend has resumed, with a likely bullish move to test the previous peak at 5,122 to follow.
However, if that scenario plays out, there is upside potential to the 1.382 projection of the correction at 5,212.
If Eurostoxx is rejected at 5,034 and slides back, the support at 4,888 could come under pressure once again
DAX has bounced from strong support at around 17,620 and is currently testing the 0.618 retracement and key resistance at around 18,208. A daily close above, combined with an RSI close back above the 60 threshold, will confirm the uptrend has resumed. The previous peak at around 18,567 is then likely to be tested, with upside potential to 18,926.
If failing to close above 18,208, DAX could slide back below 18,000.
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