dax daily outlook wed 06 apr 2016 potential bearish tone remains intact below 96909600 resistance 18

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has tumbled as expected. It has breached slightly below the first expected downside target at 9580 (printed a low of 9519 in the U.S. session) before shaping the expected minor rebound/consolidation.

Please click on this link for recap on our previous daily short-term outlook/strategy.

Key elements

• Despite the minor rebound from yesterday low of 9519 to a current high of 9603, the bearish trend is still intact for the Index.
• The key short-term resistance now stands at 9690 which is defined by the former minor swing low of 01 April 2016 @8pm and close to the 38.2% Fibonacci retracement from the most recent decline from 04 April 2016 high of 9907 to yesterday’s low.
• The significant supports remains at 9480/395 and 9255 which is our expected standard and maximum medium-term downside targets set for this week (please click here for details). Interestingly, it also coincides  closely now  with the 1.00/1.382% Fibonacci projection level taken from the decline of 30 March 2016 high @9pm to  01 April 2016 low @9pm projected from 04 April 2016 high of 9907.
• The hourly (short-term) Stochastic oscillator has just exited from its overbought region which suggests that downside momentum of price action remains intact.

Key levels (1 to 3 days)

Intermediate resistance: 9600

Pivot (key resistance): 9690

Supports: 9480/395 & 9255

Next resistance: 9930

Conclusion

The Index continues to evolve in a bearish dynamic. We have tightened the daily short-term pivotal resistance to 9690 for another potential downleg to target the expected medium-term downside targets set at 9480/395 with a maximum set at 9255.

However, a break above the 9690 short-term pivotal resistance is likely to negate the bearish tone (not a change on the medium-term bearish trend) to see a push up to retest the 9930 pull-back resistance of the “Ascending Wedge” bearish breakout (see 4 hour chart).

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