(MENAFN - DailyFX) DAX 30/CAC 40 Technical HighlightsDAX bouncing, but that may be all it is CACworking towards broken December t-line
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DAX bouncing, but that may be all it is
TheDAX 30dropped below the 200-day MA recently, but it was only an affair that lasted a couple of days. The gap on Monday has so far sustained, bringing into play the 11865-resistance level from earlier this month. Beyond there the next level to watch is the gap from the beginning of the month from 12034 up to 12252.
Broadly speaking, price action since May could be taking the shape of a head-and-shoulders pattern, with the current price action working towards a possible right shoulder. This would mean that while the current rally could extend it won't likely extend for much longer before fading and turn back lower.
From a tactical standpoint, resistance just ahead could prove challenging and a roadblock for short-term-minded longs, potentially rewarding spot for would-be shorts to take a crack. A break above should extend the bounce for now towards the gap-fill.
DAX 30 Daily Chart (just a bounce for now)
DAX Chart by Tradingview
CAC working towards broken December t-line
The CAC continues to demonstrate a little more strength than its German counterpart. Price is currently above the recent range and working towards the underside of the December trend-line. From there either the gap-fill up 5557 could be challenged or price turns down prior to it, price action pending.
Perhaps both are met with the sharp angle of the December trend-line running into the gap at some point down the road. Broadly speaking, same as the DAX, a head-and-shoulders pattern is coming into view but still has some work to do before it comes to fruition.
CAC 40 Daily Chart (watch 200-day, recent low)
CAC 40 Chart by Tradingview
Want to learn more about trading the DAX? Check out'How to Trade the DAX' , and join me weekly for technical updates in theIndices and Commodities webinar.
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---Written by Paul Robinson, Market Analyst
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