DAX and FTSE price action: is DAX turning bullish? Dead-cat bounce in FTSE?
DAX has run into stiff resistance; FTSE’s rebound appears to be corrective and what is the outlook and what are the key levels to watch?
DAX technical forecast – neutral
The strong rebound in the German DAX index over the past two weeks may have been an encouraging sign for bulls. However, the index may not be ripe for a bullish break just yet. That is, the recent sideways price action could continue in the interim.
DAX INDEX daily chart
The index, up nearly 8% since late March, is now testing quite a strong ceiling at the March high of 15706. This follows a rebound last month from a fairly strong converged cushion – the 89-day moving average, the lower edge of the Ichimoku cloud on the daily chart, and the end-2022 highs.
However, the colour-coded candlestick charts suggest that the index remains in a consolidation phase that started in late February.
DAX daily chart
Moreover, a negative divergence (rising index associated with declining momentum) on the weekly charts indicates that the two-week-long rally is losing steam. This divergence raises the bar for the index to decisively break above the crucial ceiling.
While this doesn’t mean that the broader uptrend is reversing, it implies ‘more of the same’ – that is, the recent consolidation/sideway range could continue.
FTSE daily chart
As the broader uptrend is in place, the break of the 15706 resistance appears to be a matter of time, but not imminently. On the other hand, only a break below immediate support at 14458 would indicate that the upward pressure had eased.
FTSE technical forecast – neutral
The UK FTSE 100 index is running into a vital cap: the 89-day moving average, the lower edge of the Ichimoku cloud on the daily chart, near the January low of 7708. Importantly, while the upward momentum has seemingly picked up for now, the Moving Average Convergence Divergence indicator remains firmly in bearish territory.
This follows a sharp retreat from near major hurdle at the 2018 high of 7904, pushing the index down toward the 200-day moving average. The rebound since is corrective and FTSE would need to clear the immediate barriers around 7650-7710 for the uptrend to resume.
For the moment, though, the bar is rather high for the UK benchmark index to continue its two-week-long rebound.
FTSE monthly chart
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
Start trading forex today
Trade the largest and most volatile financial market in the world.
- Spreads start at just 0.6 points on EUR/USD
- Analyse market movements with our essential selection of charts
- Speculate from a range of platforms, including on mobile
Live prices on most popular markets
- Forex
- Shares
- Indices
