- The DAX continues to press top-side levels
- Hourly chart at a glance with daily chart levels in focus
- Rising wedge formation still intact
On Friday, we described the DAX as, 'on the edge of a wedge'. This perspective came from taking a granular look at the charts, honing in on the hourly time-frame. But before we drill down our time-frame and re-examine the set-up, let's first look at the daily chart.
Generally speaking, the market has continued to defy gravity for longer than anticipated on this end. Resistance has yet to prove to be much more than a minor nuisance. Right now the DAX is trading above peaks created in May and June and challenging its best levels of 2016, created back on April 21 at 10486. The intersection of the downward trend-line off the 2015 peak and the back-side of the broken 2011 weekly trend-line are in the vicinity.
DAX (Ger30) Daily
Pulling in closer: The rising wedge we looked at on Friday is still intact. To end last week, the lower trend-line of the rising wedge was slightly breached, but recaptured heading into today. This morning the market made an attempt to move above the upper trend-line, but has thus far been unsuccessful in doing so as it approached the April high. The integrity of the rising wedge formation isn't the greatest, but nevertheless the DAX is still operating within its confines.
Today, if the DAX can't maintain its gains and reverses course, it would not only put in a key reversal day after trying to break through serious levels of resistance (solid sign of rejection), but set itself up for breaking below the lower-side t-line of the rising wedge pattern. A break of the lower trend-line along with trade below 10265 should kick in down-side momentum. Resistance comes in at 10486. A break above there would also mean an upside break of the wedge and clearance of all short and long-term resistance levels, opening up the path for a broader advance in line with longer-term technical considerations we looked at last week. (For more, check it out here. )
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---Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX.
He can be reached via email at email@example.com with any questions or comments.
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