DAX Xetra (cash index)
A sharp intraday rally has brought the DAX back to the confluence of a key near term crossroads.
This comes as the market continues to throw off mixed near term signals.
The bulls will have certainly been encouraged by the strength of the rebound yesterday after opening lower only to close strongly higher on the day and post a strong bull candle.
However there is a band of key near term resistance from the 23.6% Fibonacci retracement of the big sell-off at 12,248 an the old support of the low at 12,283.
This band has capped the past couple of sessions and is again an early barrier today.
This also coincides with the resistance of a six week downtrend of the sell-off.
A consolidation is playing out early today ahead of the key ECB monetary policy announcement today but the importance of this confluence of resistance is growing near term.
- A decisive close above 12,283 after the ECB today would be a key move in developing further recovery.
- It would open the 38.2% Fib level at 12,506 with the key late February high at 12,601 then also within sight.
However, a continuation of this downtrend would be a disappointment for the bulls now, given the strength of yesterday’s bull candle.
- There is though now a higher low support at 12,020 now in place.
Indicators on the hourly chat reflect this consolidation.