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Another false breakout for DAX

Wednesday, June 21, 2017 4:59 AM GMT

DAX performed a new high but failed to maintain the intraday gains during the yesterday’s session. The sellers stepped in and pushed the price lower creating a false breakout of the recent swing high. It is well known that false breakouts can push price aggressively in the opposite direction of the main trend. This is what is happening now. DAX is in deep red and it is currently breaking/testing the 21 EMA. If price closes below then next stop is the 50 SMA (yellow). In addition, we have noted many times the RSI’s negative divergences, which are still valid on a daily timeframe. Heading to 4 hours timeframe, bulls want price above while bears below 50 SMA. However, there is a short-term trend line below which may give a potential upside reaction. On 30m timeframe, we have noted an interesting resistance at 12780 in which bears may have a selling trading setup if prices retraces back on this.

Today’s agenda is poor, as we are not expecting important news.




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