DAX 30, FTSE 100 & CAC 40 Price Outlook:
- The DAX 30[1] is at risk of falling beneath an ascending trendline that could lead to further losses
- The FTSE 100[2] remains locked within its recent range, approaching the lower-bound amid weakness
- Similarly, the CAC 40[3] is ensnared in its own trading range with little hope of a break out
DAX 30, FTSE 100 & CAC 40 Forecasts for the Week Ahead
Risk appetite has wavered after the recent Fed minutes release[4] and equity markets have started to tilt lower as a result. Still, losses are modest at the moment and the market conditions brought about by the summer doldrums may undermine conviction in the event of a technical break. With that in mind, the major European indices could remain ensnared in their current technical formations.
DAX 30 Forecast
In the case of the DAX 30, recent losses have allowed price to probe an ascending trendline from May that looks to be at its breaking point. While a move lower would seriously erode the trendline’s influence, I am hesitant to suggest a break would spark drastic declines, but it could see the DAX 30 slip into a range similar to that of the FTSE 100 and CAC 40.
DAX 30 Price Chart: 4 - Hour Time Frame (May 2020 – August 2020)
To that end, a continuation lower may encounter resistance at the Fibonacci level around 12,500, but mounting an aggressive move beyond could be difficult in the current climate. On the other hand, a recovery rally would likely be quite timid in nature and it would have to negotiate resistance slightly beneath the 13,000 mark.
