dax potential short term drop in progress below 12200280 1849162017

Short-term Technical Outlook (Tues, 11 Apr 2017)

(Click to enlarge chart)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) had traded sideways since it printed a high of 12278 in yesterday’s (10 April) Asian session.

Key technical elements

• The Index has just staged a bearish breakdown below its former minor ascending trendline support from 06 April 2017 swing low now turns pull-back resistance at 12200.
• Since its 12387 high printed on 03 April 2017, the Index has started to evolve within a short-term bearish descending channel.
• The lower boundary of the aforementioned descending channel rests at the 12030 which also confluences with the lower boundary of a longer-term bullish ascending in place since 07 February 2017 and our medium-term pivotal support at the 12080/30 zone (click here for a recap on our latest weekly technical outlook report published yesterday).
• The significant short-term resistance stands at 12280 which is defined by the minor swing high areas of 05 April/10 April 2017 and close to the upper boundary of the short-term descending channel.
• The hourly Stochastic oscillator is now coming close to its overbought zone which suggests a potential bearish reversal in price action is looming.

Key levels (1 to 3 days)

Intermediate resistance: 12200

Pivot (key resistance): 12280

Supports: 12080/30 (medium-term pivot)

Next resistance: 12380

Conclusion

As long as the 12280 short-term pivotal resistance is not surpassed, the Index is likely to shape a potential drop to target the 12080/30 medium-term pivotal support zone before a potential recovery materialises.

However, a clearance above 12280 may negate the preferred bearish tone to see a squeeze up to retest the recent 03 April swing area of 12380.

Charts are from City Index Advantage TraderPro

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