On Friday, the DAX experienced good buying pressure from the start of the day session on through to the close. The much larger than expected U.S. NFP headline figure (+287k vs. 180k expected) helped propel European indices into the close of the week, with the DAX closing nearly 1% higher for the day than where it was prior to the release of the jobs report.
We were looking at a developing channel on the hourly, with trend-line support in focus off the 6/24 ‘Brexit’ day low as keeping the short-term pointed higher. But the broader daily and weekly charts, despite the short-term trend support and flight higher on Friday and today, still point to a weak market.
The DAX is currently attacking a familiar area of resistance between ~9730 and 9820. To be exact, the last bounce turned lower on July 4 at 9812. Traders looking to establish a short with a backstop in place could look to enter on a turn lower from here and place a stop above the July 4 high.
If a break above resistance takes hold then the bearish price structure of lower lows and lower highs would come under fire with the possibility of a higher low already developing. But until we see a strong push above resistance we continue to view the DAX through a skeptical lens.
DAX 2-hour [Daily]
(Click on image to enlarge)
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