Chart of the Day: $DAX
We turn to Europe this week with a chart of the DAX Index (cash) showing an interesting behaviour around the 7389 area. A few gaps have been observed at this level since July 2011. It has proved to be a major resistance, confirmed by yesterday’s close (and high) on that level.
The 10-day ATR is also at a low level that was seen back in July 2011 when 7389 was already acting as a resistance, which was followed shortly by an aggressive downward move.
Price has also found support from the top of an upward channel and is finding little room to evolve, adding to the idea that a swift reaction may come sooner rather than later. A move above 7491 would make 7620 very easily accessible. Failure to do so may push the price back toward the bottom of the channel.
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Anthony Cohen is a Product Specialist at CQG. He holds a diploma in Technical Analysis from the Society of Technical Analysts in London. He can be reached at email@example.com.