dax daily outlook wed 01 june 2016 further potential short term decline below 10400 resistance 18138

(Click to enlarge chart)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has staged the expected decline below the 10400 short-term pivotal resistance and met the upper limit of the short-term downside target at 10230 in the U.S. session.

Please click on this link to recap our previous daily short-term outlook/strategy.

Key elements

• Price action has staged the bearish breakout from the short-term “Ascending Wedge” lower limit now turns pull-back resistance at 10400.
• The hourly (short-term) RSI oscillator remains bearish below the pull-back resistance and the 50% neutrality level. These observations suggest that short-term downside momentum of price action remains intact.
• The next near term support rests at 10082 which is defined by the pull-back support of the former minor swing high areas of 12/17 May 2016 and the 50% Fibonacci retracement of the recent rally from 24 May 2016 low of 9771 and yesterday high of 10373.

Key levels (1 to 3 days)

Intermediate resistance: 10320

Pivot (key resistance): 10400

Support: 10082

Next resistance: 10530/650

Conclusion

Maintain short-term bearish bias. As long as the 10400 daily short-term pivotal resistance is not surpassed, the Index is likely to see a further potential decline to target the next support at 10082.

However, a break above the 10400 short-term pivotal resistance is likely to invalidate the bearish setback scenario to see a direct push up towards the 10530/650 resistance.

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