DAX/CAC Technical Highlights:
- DAX continues to make good on topping pattern; at pre-pandemic highs
- CAC testing trend-line rising up from the March 2020 panic low
DAX 40 Trading at Pre-Pandemic Levels, CAC at Two-year Trend Support
The DAX looked like it might stabilize for a period after hitting a panic low on the day Russia invaded Ukraine, but that notion is being fully put to the test. At the time of this writing the DAX is trying to recover over the Feb 24 low at 13807 that it broke earlier in the session.
In the current vincinity is the 2020 highs (13795) created right before the pandemic hit markets, coincidentally, on Feb 24, 2020. The flushing off the panic low from Thursday at a meaningful top could lead to a bounce from here.
But conviction on anything lasting isn’t high. This is a trader’s market and employing a two-way trade mentality makes the most sense from where I sit. There will be plenty of volatility to push markets strongly in both directions for the foreseeable future.
For now, the very near-term bias is neutral to positive on the above. A bounce, however, that doesn’t show good momentum could quickly turn into another short opportunity for the nimble.
DAX Daily Chart
The CAC is a fair amount below the Feb 24 low, but on that it is trading right around a trend-line from the March 2020 low. The trend-line isn’t the strongest as it only has the bare minimum required two connecting points to make it a trend-line. Nevertheless, it should be respected as support.
There is also a swing-low at 6389 from September that is in confluence with the trend-line. This could help firm up the area as meaningful. Like the DAX, the outlook for the CAC is neutral to positive for now, but that could change on a small rally.
CAC Daily Chart
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—Written by Paul Robinson, Market Analyst
You can follow Paul on Twitter at @PaulRobinsonFX