DAX/CAC Technical Highlights:
- DAX is testing the 200-day moving average
- CAC is rolling down towards another test of key trend-line
DAX and CAC Technical Outlook: Weakness is Bringing Support in Focus
The DAX has been weak of late, especially yesterday. This has the 200-day moving average in focus as a support level to watch. Previously, when it was hit towards the end of last month it didn’t hold much water, but a lot of volatility did occur as to be expected around that particular threshold.
As volatile price action around the widely-watched moving average is common, it could very well happen again here as the market outlook turns a bit dicey. We could see a jet through the 200 before reversing higher. If the DAX gets separation from the 200 on the downside, then look for the 15101/15015 area to get tested.
If the DAX can turn up from here then the first level to watch on the top-side is 15834, followed by a gap-fill up to 15917. Beyond there nothing highly visible stands in the way until the record high at 16290.
From a tactical standpoint, price action around the 200 isn’t yet triggering any kind of conviction either way; sitting tight until the picture becomes clearer.
DAX Daily Chart
DAX Chart by TradingView
The CAC hasn’t been as weak as the DAX, and on that it is seen as having a more positive outlook should risk trends here shortly start to firm up and turn higher. The CAC isn’t anywhere near the 200-day moving average, but still has a nice level of support just below.
The trend-line running up from October 2020 was thoroughly tested a few weeks back and held well. This cements the line as an important one that should help keep the market buoyed in the event it is tested. A break below would be a reason for concern and to look for lower levels ahead.
CAC Daily Chart
CAC 40 Chart by TradingView
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—Written by Paul Robinson, Market Analyst
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