dax maintain bullish bias above 9510400 support 1819472016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has continued its slow ascend towards the predefined short-term target/resistance at 9780/820 (printed a high of 9693 in yesterday’s U.S. session).

Based on yesterday’s U.S. session high of 9693, it still has a 7.4% gap difference as compared to its close price of 10413 printed on the late 23 June’s U.S. session before the announcement of the U.K.’s EU referendum results. Interestingly, U.K. FTSE 100 futures has almost recovered its post Brexit horrendous decline and it only has a gap difference of 0.45% as compared to its pre Brexit closing price.

Please click here to recap our prior short-term daily technical outlook/strategy.

Today key Germany and Eurozone economic data releases as follow:

• Germany Retail Sales for May @0600 GMT (3.0% y/y & 0.7% m/m estimates)
• Germany Unemployment Rate for Jun @0755 GMT (6.1% estimate)
• ECB Monetary Policy Meeting Accounts @1130 GMT

Key elements

• Despite coming close to its near-term resistance of 9780/820, the 4 hour RSI oscillator remains bullish above its supports and still has room to manoeuvre to the upside before reaching an extreme overbought level. These observations suggest that upside momentum of price action remains intact.
• The key short-term supports to watch now rests at 9510 follow by a 9400 (ascending trendline from last Friday, 24 June low & the 61.8% Fibonacci retracement of the current rally seen from this Monday, 27 June low of 9213 to yesterday’s U.S. session high.
• The next resistance will be at 10180 which is the upper limit of the “Expanding Wedge” (depicted in dotted purple) in place since 21 April 2016 high and a Fibonacci cluster.

Key levels (1 to 3 days)

Intermediate support: 9510

Pivot (key support): 9400

Resistances: 9780/820 & 10180

Next support: 9120 (medium-term pivot)

Conclusion

Maintain bullish bias. We have tightened the short-term pivotal support to 9400 for a further potential upside movement to target 9780/820 before the “Expanding Wedge” range resistance at 10180.

However, a break below the 9400 short-term pivotal support is likely to negate the preferred bullish tone for a slide to test this medium-term pivotal support set at 9120 which is now also the lower limit of the “Expanding Wedge”.

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