Technical Analyst, Saxo Bank
Summary: DAX/GER40 forming rising wedge pattern indicating a correction could be imminent. A final exhaustive move possible but uptrend is stretched
DAX is forming what a rising wedge like pattern and the uptrend is very stretched. Divergence on RSI indicates the uptrend is weakening and has been for quite some time but the trend is your friend. Until it ends. Where it will end is of course hard to predict but first indication could be if DAX closes below the lower rising trend line in the wedge.
If a bearish breakout is followed by a close below 15,269 it could trigger a sell-off down to support at around 14,906 possibly 14,654 before a correction.
However, a final exhaustive push higher to resistance at around 14,619-15,736 cannot be ruled out.
IF DAX breaks bearish out of the Rising Wedge followed be an RSI close below 60 threshold that could accelerate a sell-off.
The GER40 cfd levels: Support at 14,267, 14,902 and strong support at 14,615. Resistance at around 15,738
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