Chart of the day Bearish elements remain intact for DAX

Short-term technical outlook on DAX (Thurs, 22 Aug 2017)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) had traded lower yesterday and printed a new marginal minor “lower low” of 12019 within a minor down move in progress from 16 August 2017 high.

In addition, the Index has continued to evolve within a medium-term bearish descending channel in place since its current all-time high area seen on 20 June 2017.

Let us now review its shorter-term technical elements.

Key elements

• The current down move is being capped by a descending trendline from the minor swing high of 16 August 2017 now acting as an intermediate resistance at 12150.
• The significant short-term resistance now stands at 12190 which is defined by the 19 August 2017 minor swing high area and the 61.8% Fibonacci retracement of the current decline seen from 16 August 2017 high to yesterday’s low of 12019.
• The hourly Stochastic oscillator has reached an extreme overbought level which suggests limited upside potential in the price action of the Index at this juncture as upside momentum of the push up seen from yesterday’s low of 12019 has started to abate.
• The next significant short-term support rests at 11930 which is defined by the minor swing low area of 11 August 2017.

Key Levels (1 to 3 days)

Intermediate resistance: 12150

Pivot (key resistance): 12190

Support: 11930

Next resistance: 12340 (medium-term pivot)

Conclusion

Therefore, as long as the 12190 short-term pivotal resistance is not surpassed, the Index may see a further potential push down to test the 11930 short-term support in the first step.

On the other hand, a clearance above 12190 is likely to negate the bearish tone to see a further corrective rebound to test this week’s medium-term pivotal resistance at 12340.

Chart is from City Index Advantage TraderPro

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