DAX recovery consolidating in front of US inflation

DAX Xetra (cash index)

There is a trend higher that has developed over the past seven sessions, but the bulls need to grasp the impetus once more today to prevent the rally from losing momentum.

Although there was a positive session yesterday, including a filled upside gap, a close below the open leaves question marks over the strength of the buying.

Today’s move has found support around the seven day uptrend but now needs to use this support to push higher once more to test the key resistance band 12,500/12,600.

This comes as the RSI is now back to 50 and the Stochastics threaten to roll over.

Reaction to US CPI this afternoon could therefore be key to the near term outlook.

  • There is support initially from yesterday’s low at 12,360 whilst the hourly chart shows the near term pivot at 12,284 is strengthening as a floor.
  • A move above initial resistance of yesterday’s high at 12,455 would regather some impetus, especially on a closing basis.
  • However the 38.2% Fibonacci retracement at 12,505 and the key February high at 12,601 are key levels overhead.