DAX Xetra (cash index)
The recovery of the past three weeks has been consolidating in recent days as the overhead supply and resistance around 11,000 has become a ceiling.
It is interesting to see that the early rebound today on a risk rally has once more failed under the 11,000 resistance.
- It seems as though this is a key crossroads that the market is struggling to pass however, equally the market is holding above support not only in the band 10,585/10,700 but also above the recent lows at 10,786.
Momentum is positive with the RSI above 60, MACD lines tracking higher and Stochastics above 80 and interestingly, the 21 day moving average has now turned higher for two consecutive days for the first time since August.
- A closing break above 11,000 would be a six week high but also effectively complete a base pattern.
The importance of this resistance is growing by the session.
- The hourly chart shows initial gap support at 10,886 which remains open from yesterday’s high.