DAX Xetra (cash index)
The bears remain in force for the DAX as yesterday’s session once more showed the selling pressure ramping up into the close.
An intraday failure around the underside of the old June low of 12,104 would have been a real disappointment for the bulls, however, once more this morning there has been an initial reaction higher in the early moves.
Is this simply part of the consolidation ahead of Non-farm Payrolls or is it the bulls trying to make something happen?
This is playing out with the RSI around the 30 level, where previous key lows have come about during 2018.
So this should put traders on alert that the downside potential is becoming limited now.
On the hourly chart there is a hint of a positive divergence on the hourly RSI and the hourly MACD lines have started to cross higher.
Calling a bottom with momentum divergences can be a difficult task, but the concept that a bottom is progressing is growing.
The hourly RSI moving decisively above 40 would be a signal.
- Yesterday’s low at 11,945 is initial support but there is now little real support until 11,792 and the 11,726 key Mach 2018 low.
- Initial resistance is 11,990, with a move above the old low at 12,104 the potential trigger to a more substantial recovery, especially given yesterday’s failure.