The German DAX posted an impressive reversal off technical resistance yesterday and a break below near-term upslope support could expose a larger shift in price. Keep in mind we still have the ECB interest rate decision on tap tomorrow morning- here are the levels to consider heading into the release.
DAX Daily Price Chart
Technical Outlook: The DAX has been trading within the confines of a descending pitchfork formation[1] extending off the 2017 high with the index posting an outside-daily reversal candle yesterday off confluence resistance at 12652/66- an area where the 50% retracement of the yearly range and the 200-day moving average converge on the 50-line.
The daily momentum signature has made a marked turn at the 60 threshold and suggests the risk remains for further losses while below the weekly highs. The pullback is now testing initial daily support at the 2015 high at 12395 with a break lower from here targeting the median-line backed by 12178. Broader bearish invalidation stands at the 12876 resistance confluence.
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DAX 120min Price Chart
Notes: A closer look at price action sees the DAX trading within a near-term ascending pitchfork dating back to March with the median-line offering resistance on the advance off the yearly low. Yesterday’s reversal takes price below the weekly opening-range[4] lows and further highlights the downside risk. A break lower from here targets confluence support at 12290- look for a reaction there. Subsequent support targets eyed at 12178 and 12071.
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