DAX 30/CAC 40 TECHNICAL HIGHLIGHTS:
DAX testing the important 2011 trend-line
CAC falling short of eyed price resistance
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DAX TESTING THE IMPORTANT 2011 TREND-LINE:
Last week, when we last looked at the DAX the general outlook was for it to push up to the 2011 trend-line before possibly running into trouble. With the German benchmark at this important threshold weakness, which has already begun to creep in, is expected.
Ideally, we see another drive up and more thoroughly test the long-term trend-line, with an eventual strong rejection to signal a price decline. But even without such an event, weakness still looks more probable to sustain than strength.
The first area of support clocks in just under the 11k-mark, where price support from December found a bit of resistance and forced a period of consolidation prior to last week’s shot higher into the 2011 trend-line. The bottom of the consolidation period runs around 10800.
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DAX DAILY CHART (2011 T-LINE, 11000/10800 SUPPORT)
CAC FALLING SHORT OF EYED PRICE RESISTANCE
Last week, the CAC made a push towards resistance from Oct-Dec but fell shy of the zone. A short-lived drive into 4896/944 could make for a thoroughly testing, and we may yet see that. But if the DAX declines from here then so will the CAC in all likelihood. On weakness, support comes in around 4730.