DAX 30 / CAC 40 Technical Highlights
- DAX 30 breaking out of wedge formation
- CAC 40 also breaking out similar pattern
DAX 30 breaking out of wedge formation
The narrowing range in the DAX is finally starting to break with today’s rout (down over 3% at the time of this writing). As long as the breakdown sustains there could be significant losses ahead. Looking lower, the first meaningful level of support comes in around the 12200 area.
The 200-day is working sideways almost in straight-line fashion, clocking in at 12195. It should stay steady around that level for a while given its lack of any kind of trajectory. It is in near confluence with the July 30 low at 12253. We could see a bounce off confluent support, but that may be all it is as global markets could continue to sell off.
Looking beyond aforementioned support the next meaningful swing-low isn’t until the swing-low in June at 11597. To negate the currently bearish outlook it will take a lot of work on the part of the DAX to fix today’s break.
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DAX Daily Chart (breakout unfolding)
DAX Charts by TradingView
CAC 40 also breaking out similar pattern
The CAC has also been wedging up, albeit from lower levels relatively speaking. The CAC is only a stone’s throw away from new multi-month lows. It was never able to even recapture the 200-day MA during its recovery.
With it starting to break the underside line of the wedge the move appears to only be getting started. Watch 4691, this is viewed as an important support level that if broken should only further along momentum. Looking to support, beyond 4691 you have to go down to the May low at 4194 for the next meaningful swing-low. At that point the CAC will be in retest territory of the March panic.
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CAC 40 Daily Chart (starting to break wedge)
CAC Chart by TradingView
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—Written by Paul Robinson, Market Analyst
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