Overall, DAX continues to balance above its medium-term upside support line taken from the low of August 15th. But lately, the German index started struggling with forming a new higher high, as it is still trading below the key area of resistance, at 13315, marked near the highs of November 7th, 12th and 26th. Given all the information above, we will take a neutral stand for now and wait for a clear break through one of the highlighted areas on the chart, before examining a further short-term directional move.
If DAX manages to break above the previously-discussed 13315 barrier and then easily overcomes the 13375 hurdle, which is the high of November 19th, this could attract more buyers into the game. After that, the German index could travel a bit higher, where the next important pit-stop might be near the 13600 level, marked by the highest point of January of 2018.
Our oscillators, the RSI and the MACD, are also in support of the idea to stand pat, at least for now. Although the RSI is above 50, it is currently running flat. The MACD is also pointing nowhere. The indicator remains above zero, but below its trigger line.
On the downside, if by any chance the price slides below its key support zone between the 12987 and 13039 levels, which are marked by the high of October 28th and the low of November 21st respectively, this could temporarily worry the bulls. Such a move could increase DAX’s chances of drifting a bit lower, initially aiming for the 12793 obstacle, a break of which may clear the path to a test of the aforementioned upside line.
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