dax holding above 10550 support but 10690 needs to break to see further potential upside 1829042016

Daily Outlook, Thurs 01 September 2016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has failed to have a proper bullish break above the 10650 minor range top in place since 22August 2016 but managed to hold above the predefined tightened pivotal support of 10550 which was highlighted in yesterday’s daily technical outlook strategy (click here for a recap).

Key elements

• Yesterday’s dip in price action has managed to stall right at the 10550 pivotal support (printed a low of 10552) which is defined by the lower boundary of medium-term bullish ascending channel in place since 06 July 2016 low.
• However, it is still capped below the minor range top at 10650/90.
• The next short-term significant resistance remains at the 10870/990 zone which is defined by the medium-term swing high area of 07/30 December 2015 and the 61.8% Fibonacci retracement of the multi-month decline from 12 April 2015 high to 11 February 2016 low.

Key levels (1 to 3 days)

Pivot (key support): 10550

Resistances: 10690, 10870/990 & 11050/70

Next support: 10380 (medium-term pivot)

Conclusion

Maintain bullish stance above 10550 short-term pivotal support but 10690 needs to be taken for the Index to see a potential rally to target the next resistance at 10870/990 in the first step.

However, a break below the 10550 short-term pivotal support is likely to negate the preferred scenario to see another round of slide to test the key medium-term pivotal support at 10380.

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