DAX Xetra (cash index)
The recovery that has been threatening in the early sessions of 2019 really began to take off on Friday as a huge bull candle and positive session has seen the market rallying to a two week high.
A gain of over 3% in the wake of the US jobs report and dovish comments from Fed chair Powell has certainly shifted the outlook near term.
The move above the resistance band 10,585/10,700 now means that this is a basis of support for the bulls to reference in the recovery.
The improvement is really coming through in the momentum indicators, with the bull cross buy signal on the MACD lines, Stochastics accelerating higher and RSI also at one month highs.
An early consolidation has greeted traders this morning, but holding above 10,700 will now help to build on the recovery.
If this can be achieved then with the improvement in momentum, a move back towards the key medium term overhead supply and resistance around 11,000 could be seen.
On the hourly chart there is a slightly stretched RSI position which could induce a mild unwinding move which could be seen as an opportunity for the bulls.
- Watch for the formation of support above the 10,585/10,700 pivot and renewed buy signal.
- Initial resistance at 10,840/10,904.