Jump to content

DAX 40 and CAC 40 Technical Outlook: In Face-off with Resistance


Recommended Posts

DAX/CAC TECHNICAL HIGHLIGHTS:

  • DAX hit a big level and is currently reversing
  • CAC is turning down off after test of 200-day MA

DAX 40 and CAC 40 Technical Outlook: In Face-off with Resistance

DAX 40 AND CAC 40 TECHNICAL OUTLOOK: IN FACE-OFF WITH RESISTANCE

After a massive recovery the DAX is finally running into an area of resistance that it is finding formidable to overcome. The area from just over 14800 to 15100 is a big one, and with the market reversing the other day at big resistance, a retracement, or sideways period at best, is to be expected.

There is short-term support at the top of a range created mid-month at 14553. The DAX may look to hold this spot and retest the aforementioned resistance zone, but given how far we have come in such a short period of time we may see more downside towards 14109 or worse.

For now, the trading outlook is not favorable for longs given overhead resistance and overbought conditions. It could become a bit of a choppy market with a downward bias. Another failure up around 14800/900 could offer up a good opportunity for would-be shorts to play this scenario.

 

DAX DAILY CHART

dax daily chart

DAX Chart by TradingView

The CAC snuck above horizontal resistance dating to December at 6747, but quickly found it difficult to climb above the 200-day moving average only 30 handles higher. The smallish reversal lower could continue in the near-term.

There is some support around 6655 that could keep price bobbling between support and resistance. It is seen as taking a little time of digestion before the CAC can reassert itself towards higher levels. If we do see the recent high at 6829 taken out, watch the trend-line off the Jan high.

Overall, though, the outlook for the CAC is naturally similar to that of the DAX, but the CAC remains a bit more bullish in the absence of major resistance, while the DAX remains seen as the better short given its major levels to overcome.

CAC DAILY CHART

cac daily chart

CAC 40 Chart by TradingView

Resources for Forex Traders

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---Written by Paul Robinson, Market Analyst. 31st March 2022. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      22,109
    • Total Posts
      92,976
    • Total Members
      42,497
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    GoodLuck
    Joined 04/06/23 13:40
  • Posts

    • The inclusion of trading volume as a standard indicator in charting software for the past three decades is not without reason—it offers a vital advantage. Volume analysis grants traders valuable insights into the actions of market participants at different price levels. By focusing on volume, traders can react more effectively to price movements rather than attempting to predict the future direction of prices, as is often the case with many other technical indicators. 📍Key points about volume Here are the key points regarding the volume indicator commonly plotted on the X-axis in trading: 🔹Volume Indicator: The volume indicator calculates the total number of shares or contracts traded during a specified time period. It is usually displayed as a histogram or line chart, with time represented on the X-axis. 🔹Liquidity: Volume is a critical metric as it provides insights into the liquidity of a security. Higher volume generally indicates greater market participation and liquidity, making it easier to buy or sell the asset without significantly impacting its price. 🔹Confirmation: Volume can validate the authenticity of price movements. In an uptrend, increasing volume supports the bullish move, indicating strength and conviction among buyers. Conversely, declining volume during an uptrend may signal weakness or lack of interest. The same principles apply to downtrends. 🔹Breakouts and Reversals: Volume analysis is often employed to identify breakouts and potential trend reversals. A significant increase in volume during a breakout suggests a higher probability of a sustained move, while decreasing volume near a support or resistance level might indicate a potential reversal. 🔹Divergence: Volume can unveil discrepancies between price and market sentiment. For instance, if prices are rising while volume is decreasing, it could suggest that the rally is losing momentum and a reversal may be imminent. Similarly, increasing volume during a price decline might indicate selling pressure and the potential for further downside. 🔹Confirmation of Patterns: Volume can serve to confirm or invalidate chart patterns such as triangles, head and shoulders, or double tops/bottoms. Higher volume during pattern formations enhances their reliability, while low volume can cast doubt on the significance of the pattern. 🔹Watch for High Volume: Unusual spikes in volume can indicate significant market events, such as earnings releases, news announcements, or institutional buying/selling. Abnormal volume levels can lead to increased volatility and potentially present trading opportunities. 🔹Relative Volume: Comparing current volume to historical average volume helps assess the significance of current trading activity. Higher volume relative to the average may imply increased interest, while lower volume might suggest a lack of conviction or reduced market participation.
    • I don't know but it looks like a really awesome service Because I have come across all sorts of mixers in my work  
    • Charting the Markets: 2 June Indices rally as US agrees debt ceiling bill. EUR/USD, GBP/USD rally while EUR/GBP stabilises as US debt ceiling bill is passed. And WTI recoups recent losses while gold, silver on track for first weekly advance. Axel Rudolph FSTA | Senior Financial Analyst, London | Publication date: Friday 02 June 2023               This is here for you to catch up but if you have any ideas on markets or events you want us to relay to the TV team we’re more than happy to.
×
×
  • Create New...