DAX Bounces off a Crucial Support

By Tomasz Wisniewski|

Published: July 26 2022, 14:10 GMT+0

DAX Bounces off a Crucial Support


Tuesday’s been pretty bad for the DAX so far, but the second half of the day could bring better news as the end of the European session signals a light at the end of the tunnel.

In general, the last several days were great for the German index. A crucial thing happened on July 14th when the price bounced from the 12440 support, which currently serves as an unbreakable bullish stronghold. One day later the price managed to break the mid-term down trendline (blue), which confirmed a buy signal.

DAX peaked on July 20th, and since then, we’ve had a bearish correction which was beautifully shaped like a flag (green). Today, the DAX is testing the lower line of the flag and the first reaction was a bounce. Worth mentioning is that besides the lower line of the flag, we have a 38,2% Fibonacci in the same place, as well as a support coming from the local tops from July 8th and 18th (blue).

As long as the price stays above the blue area, the sentiment is positive, and the situation looks promising for the buyers.