DAX/CAC Technical Highlights:
- DAX bounce nearing first test of resistance around 12600
- CAC trading at confluence of resistance
- Tactical considerations outlined
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DAX nearing first test of resistance around 12600
The DAX continues to trade higher in a sluggish manner, most recently taking out a steep trend-line off the record high, however; the first real test of resistance may not be far off around 12600, a peak carved out late last month.
If the market doesn’t trade much higher from here a lower-high could carve itself out in what may be a developing sequence of lower-highs, lower-lows starting in January. Overall, the price action for the DAX still looks corrective, with more work needed before the bounce can be considered anything more.
In the near-term, on weakness keep an eye on a pair of intra-day lows as both days resulted in solid swings higher once the DAX bottomed; 12177, 12020. A break below both will have another leg lower well in sight. Hold above and the chop higher can continue.
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DAX Daily Chart
CAC trading at confluence of resistance
The CAC is currently trading at resistance by way of a trio of levels and lines. There is price resistance dating back to November, the 200-day MA, and the trend-line off the January high. Should we see a turn down from around the current vicinity, a wedge dating back towards the beginning of last month could begin to come into view.
A push through confluent resistance is needed to further along the bounce, but a swing high beyond 5365 will need to be overcame first. The French index has been broadly stronger than its German counterpart, but in the short-term has a bigger hurdle to overcome.
CAC Daily Chart
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—Written by Paul Robinson, Market Analyst
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