DAX fails to regain much ground
The DAX has been gradually drifting lower overnight, following on from the sharp sell-off in the early morning. The clear channel formation has seen a downside fake-out, highlighting the risk of trading a breakout.
Given that a bearish view is held unless we see a break through 10,154, another leg lower seems the likeliest event in the short-term. However, any closed hourly candle above 9972 would provide an increased likeliness of a stronger move higher, with 10,012 and 10,042 the next resistance levels.
Dow shows signs of improvement
The Dow Jones has begun to show some signs of improvement, which is not reflected in the FTSE and DAX. Yesterday’s selling failed to break through the 29 March low of 17,648, meaning we have now seen a higher low in place.
With current price trading in a symmetrical triangle formation, we are awaiting a breakout for direction. As such, a closed hourly candle above 17,781 would provide a more bullish short-term view, with 17,804 and 17,845 the next resistance levels of note.
Alternately, a close below yesterday’s low of 17,666 would provide a more bearish emphasis, with 17,484 the next major support level in view.