Technical analysis - DAX and gold review


Looking at this week's price activity it is evident to see that the test of the topside of the down trend, for the time being, was significant support. We have seen the DAX rise 4.5% since last Friday's swing lows to yesterday swing high. With this in mind this certainly negates the double top formation previously mentioned, as price retraced through the midpoint of the formation. At present it certainly looks as though the market is taking a breather from the recent gains made over the last two days.


Moving forward should this momentum continue the DAX could face short term resistance at the previous swing highs of 10780/10820 and should selling pressure increase potential support could reside at 10520 10425 10385.


A point to note of interest is that the swing low of the 16th could be acting as the trend support as it is a higher low from its previous swing low a breach of 10820 could suggest a continuation of the trend from February and June lows.


Following from Monday's post we can see by the chart that the horizontal support line and trend line held as prices rallied after the Federal reserve’s dovish announcement of maintaining the 0.25-0.5% federal funds rate. However it’s not all plain sailing what we can see here is that price is still converging in a descending formation which may highlight the continued selling pressure. Now should prices falter at current levels support would be eyed at the horizontal line at 1310/08 albeit trend support comes in at around 1320. On the flip side should this bullish momentum continue resistance could be faced at 1340 and the previous swing high of 1353.


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