Technical Analyst, Saxo Bank
Summary: Main EU Indices likely to resume downtrend after correction
DAX/GER40 rejected at key resistance
EuroStoxx50 forming top and reversal pattern
DAX has failed to close above upper falling trendline and is being rejected at the strong resistance at around 15,280
DAX is likely to test support at area 14,979-14,933. A close below is likely to fuel a sell-off down to 14,500 level.
For DAX to establish an uptrend a close above 15,280 is needed. An uptrend that could be quite limited with strong resistance at around 15,575
GER40 cfd. Running out of steam below resistance at around 15,300. Likely to resume downtrend. A close below 14,936 is likely to accelerate selling to lower levels to 14,500 possibly lower
A close above 15,304 upside potential to 15,516 EuroStoxx50 is being rejected at the 0.382 retracement at around 4,184 just below the 4,200. RSI has failed to close above 60 threshold thus still in negative sentiment. The past three days of trading have formed a Doji Evening like top and reversal pattern (circled) meaning down trend could resume.
Currently testing the falling trendline and a close back below could fuel further selling.
A close above 4,195 is likely to push the Index to next resistance at 4,235 where the 100 and 200 daily Moving Average are adding to the resistance.
EU50 cfd Rejected at 4,200.RSI rejected at 60. GER40 likely to resume downtrend. Support at around 4,084.
Strong resistance at 4,218
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