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You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 70% of retail investor accounts lose money when trading CFDs with this provider.
You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

An unwinding correction in the uptrend is a chance to buy DAX

DAX Xetra (cash index)

The bulls have failed to build on a decisive positive daily candlestick, but there is still a positive outlook on the DAX and weakness remains a chance to buy.

Another break to multi-month highs yesterday took the market into the 11,725/11,865 key long term resistance band of the old 2017/2018 floor which is now overhead supply.

This means that this is a key crossroads moment for the DAX.

Momentum indicators are set up positively even though there has been a tick lower on RSI and Stochastics from their strong configuration.

There is an uptrend of the past five weeks at 11,620 today and is a basis of support for any slip back.

  • The intraday move lower gapped below the 11,725 pivot this morning, but there is near term support between 11,625/11,677 as a buy zone.

This is an unwinding move in the trend higher and is still likely to be seen as a buying opportunity.

The main caveat to this would be the FOMC decision tonight which could change sentiment on a hawkish surprise, however in the absence of this there is a continued recovery outlook on the DAX.

  • With initial resistance at 11,772 and yesterday’s high of 11,823 a close above 11,865 would be the key bullish breakout and open the next resistance around 12,450.

 

Richard Perry

Richard Perry

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