DAX tumbles once more
The DAX returned to the head and shoulders neckline of 10,629 yet again this morning, with the index selling off as a result. This provides a continuation of the recent bearish view, with 10,513 the next key hurdle to watch out for. Should we see an hourly close below 10,550, it would be a strong indicator that we are going to see another move lower and through 10,513 soon.
However, be aware that the 10,481-10,532 zone represents a major area of support and as such will be a significant hurdle to overcome. Should that occur, then a deeper pullback towards 10,366 or 10,261 would be likely. Conversely, a convincing hourly close above 10,629 would negate this bearish short-term view.
Dow to turn lower once more
The Dow Jones has been consolidating over the past 24 hours, following a 61.8% retracement of the downturn seen earlier in the week. On an intraday basis, we are seeing the top of this consolidation round off, with the stochastic highlighting that momentum may be on the turn once more.
As such, the Dow look likely to turn lower once more for a move into 18,533 and 18,469 support. This would form a bearish head and shoulders pattern should it come to fruition. This bearish view would be negated with an hourly close above 18,669.