DAX & CAC 40 Technical Outlook: Uninspiring Bounce Thus Far

DAX/CAC Technical Highlights:DAX broke wedge formation, testing March trend-lineCAC bias looking lower yet after initial bounceDAX & CAC 40 Technical Outlook: Weak Bounce So FarThe DAX recently declined from a wedge formation after an initial fake-out breakdown from the same pattern. The recent bout of weakness has brought into play the March 2020 trend-line, a threshold that is thus far holding but not in a highly meaningful manner.The bounce the past couple of days has been unable to register much power and if this continues, given the DAX is sitting on a big line of support, then risk will very quickly rise towards seeing another round of selling. Weak reactions at key thresholds often indicate it will be broken.In the event this the case, the next decent level of support shows up around the May low at 14816. From there should things deteriorate further we will have to start thinking about the rising 200-day MA at 14283.But before thinking about a decline of that size, we must first continue to respect the March trend-line as support. From a tactical standpoint, even though buyers have yet to show up in earnest, support offers would-be longs an opportunity to enter with a line-in-the-sand from which to asses risk.DAX Daily ChartDAX Chart by TradingViewThe CAC has undergone a bit of a larger bounce, but it doesn’t have support at its feet the same way that the DAX does. The downward trend off the highs remains intact and leaves room for further weakness.It is unlikely a new low from Monday develops if the DAX holds the March 2020 trend-line, but if it does break down then the next level of support to watch clocks in at May low at 6150.CAC Daily ChartCAC 40 Chart by TradingViewResources for Forex TradersWhether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.—Written by Paul Robinson, Market AnalystYou can follow Paul on Twitter at @PaulRobinsonFX
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