DAX bounces after sharp sell-off
Yesterday was a particularly choppy day for the DAX, with price selling off sharply to 10,388, marginally below the crucial 10,410 support level. This failed to hold and ultimately, we have seen a decent recovery since. Given the fact we did not see an hourly close below 10,410, a bearish view is not in play.
However, the fleeting move below this level is certainly a warning sign and points towards the potential for a move lower once more. We would need an hourly close back above yesterday’s high of 10,659 to provide more confidence of the bullish view. Meanwhile, an hourly close below 10,410 would provide a bearish outlook for the index.
Dow respecting trendline resistance
The Dow Jones continues to respect the descending trendline of a triangle which was negated yesterday with a break below 18,490. Given that break lower yesterday, it is likely we will see the index turn lower to continue the weakness evident yesterday.
With that in mind, a bearish short-term view is in place unless we see an hourly close above 18,585.