Short-term technical outlook on DAX/Germany 30 Index (Thurs 04 Apr)
Key technical elements
- From its 25 Mar 2019 swing low of 11270, the Germany 30 Index (proxy for the DAX futures) has staged a rally of 6.3% to print a high of 11978, a 5-month high since 16 Oct 2018. It also has reintegrated back above the former neckline support of the major “Head & Shoulders” bearish reversal configuration at 11800.
- The on-going swift rally from its 25 Mar 2019 swing low has led the daily RSI oscillator to hover at its overbought region and the shorter-term hourly RSI oscillator has broken down below a significant corresponding ascending trendlline support in place since 25 Mar 2019 low (starting point of the on-going swift rally). These observations suggest that the current up move is overstretched and the risk of a minor pull-back in price action increases at this juncture.
- The next significant near-term supports rest at 11800 (the reintegration level of former Head & Shoulders” neckline & 23.6% retracement of the swift rally from 25 Mar 2019 low to 03 Apr 2019 high) and 11630 (minor ascending trendline from 26 Mar 2019 low & 50% retracement of the swift rally from 25 Mar 2019 low to 03 Apr 2019 high).
Key Levels (1 to 3 days)
Pivot (key resistance): 11980
Supports: 11800 & 11630
Next resistance: 12100 (upper limit of long-term pivot)
If the 11980 key short-term pivotal resistance is not surpassed, the Index is likely to shape a potential pull-back to target the 11800 near-term support and a break below it sees a deeper pull-back towards 11630.
On the other hand, a clearance above 11980 sees the continuation of the rally towards next resistance at 12100 (upper limit of the long-term pivot & primary descending trendline from 23 Jan 2018 high).
Charts are from City Index Advantage TraderPro
GAIN Capital UK Limited (trading as “City Index”) is an execution-only service provider. This material, whether or not it states any opinions, is for general information purposes only and it does not take into account your personal circumstances or objectives. This material has been prepared using the thoughts and opinions of the author and these may change. However, City Index does not plan to provide further updates to any material once published and it is not under any obligation to keep this material up to date. This material is short term in nature and may only relate to facts and circumstances existing at a specific time or day. Nothing in this material is (or should be considered to be) financial, investment, legal, tax or other advice and no reliance should be placed on it.
No opinion given in this material constitutes a recommendation by City Index or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although City Index is not specifically prevented from dealing before providing this material, City Index does not seek to take advantage of the material prior to its dissemination. This material is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.