Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
Technical Analyst, Saxo Bank
EuroStoxx50/ EU50 cfd is trading higher this morning to new all-time high.
RSI is also moving higher and is currently above 80 i.e., in overbought territory, a very stretched uptrend.
However, there is no divergence on RSI indicating higher Index levels and there is no strong resistance levels ahead.
DAX gapped higher right at the opening to spike above 17K but is, at the time of writing, fading. If that scenario is continuing until the end to the trading day the Index could be forming a top and reversal pattern.
If DAX is closing the opening gap and especially if closing below 16,760 a correction is likely to be unfolding.
RSI is at an extreme level not seen in decades (if ever). Being in overbought territory a correction is getting closer and closer.
If DAX is closing below 15,760 there is some support at around 16,528 but a larger correction lower could be in the cards