The Dax firmly bounced off strong support at around 11,854, meaning that the gap is still intact. The bounce reached 0.786 retracement – a bit more than anticipated. However, sellers quickly regained from the get go this morning.
RSI is still bullish since it has not been below the 40 threshold. However, a close of the gap will most likely push RSI below. It is crucial for the Dax not to close the gap – unless you are short, that is.
A close of the gap is likely to fuel a further sell-off towards 11,250.
A close above 12,310 is needed to reverse the downwards pressure.