Sunday, 24 September 2023 09:28 GMT

DAX And CAC 40 Technical Outlook: Turning Lower Off Resistance

(MENAFN- DailyFX) DAX/CAC Technical Highlights:

  • DAX hit a trend-line dating back to the January highs
  • CAC 40 coming off a run-in with the 200-day MA, June highs

DAX and CAC 40 Technical Outlook: Turning Lower Off Resistance

The DAX turned forcefully lower yesterday after running into the trend-line running off the January high. The turn down further validates its meaning as we move forward, and on that will become a meaningful hurdle in the near-term and possibly longer-term.

Working within the framework that the rally off the July lows is countertrend in nature within an ongoing bear market, and given that the rally is extending into the most seasonally weak period of the year, it is anticipated we have already or will see a significant top form.

For now, as long as we don't see the DAX climb back above the weekly high at 13947, then the outlook is seen as bearish. The first level of near-term support is at 13455 followed by 13042, a good distance lower. Ultimately, though, looking for the July low at 12390 to be broken by a considerable amount before the year is over.

Advertisement DAX Daily Chart

DAX Chart by TradingView

The CAC is turning off the 200-day moving average after very briefly trading over the June high at 6593. The turn down from near confluent resistance makes this a meaningful event. As long as we don't see the weekly high at 6608 broken, then look for lower levels in the near-term at the least, and just like the DAX looking for a larger top (either this week or relatively soon).

The first level of near-term support clocks in at 6449, followed by 6338. More broadly speaking, at some point I expect 5756, the March low, to be broken by a material amount.

CAC Daily Chart

CAC 40 Chart by TradingView

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---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX


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