dax daily outlook fri 02 oct risk of further decline towards range support at 9360 1462732015

(Click to enlarge chart) What happened yesterday The Germany 30 Index (proxy for the DAX) has drifted lower and broke below the 9580 daily pivotal […]

(Click to enlarge chart)

What happened yesterday

The Germany 30 Index (proxy for the DAX) has drifted lower and broke below the 9580 daily pivotal support. The preferred “push up” scenario towards the trendline resistance joining the highs since 09 September 2015 high @2pm has been invalidated.

Please click on this link for a recap on our previous daily outlook.

Key elements

The Index has a failure bullish breakout above the 9710 range top as price action has failed to hold above it and reintegrated back into its range configuration in place since 24 August 2015.
The lower limit (support) of the range configuration stands at 9360 with the respective upper limit (resistance) at 9800.
The hourly (short-term) RSI oscillator has broken below its former trendline support and remains below the 50% neutrality level. It has not dipped into its extreme oversold level yet which suggests that downside momentum remains intact.

Key levels (1 to 3 days)

Pivot (key resistance): 9600

Support: 9360

Next resistance: 9800

Conclusion

Short-term technical elements have turned bearish. As long as the 9600 daily pivotal resistance is not surpassed, the Index is likely to see a further decline to test the range support at 9360.

On the flipside, a break above the 9600 pivotal resistance may negate the bearish tone for a squeeze up towards the range resistance now at 9800.

Disclaimer

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