Dax fell further to our target of 5455 and blipped to 5444 on US unemployment. We recovered to close above 5464 and a short term bounce now looks possible to unwind oversold conditions.
Our first target for the upside is 5514 with a move higher taking us to 5532/38 and on to solid resistance at 5552/54. This should be difficult to over come today but a break higher would 5583/86. This level should be a problem for bulls today as bears will see this as an opportunity to establish fresh short positions and push for a move lower once again. However if bulls can keep the momentum going and take prices through this resistance they should be able to reach as far as 5619/21. Bears will be out to defend this area, confident that they have the short term trend in their favour and they should be able to take control of the market from here.
If we sink below 5455 again today then we may see another test of 5444. This needs to hold as a sustained break can take prices lower once again to a target of 5393/90. This is an opportunity for bulls to establish long positions and look for a bounce back in prices.
Eurostoxx hit the target of 2736 on the downside and then briefly overshot on the US unemployment
numbers but recovered to close at 2750.
The market now looks set for a bounce to unwind oversold conditions in the short term. If we can remain
above 2736 we should see a move higher to 2765 then 2776 and on to better resistance at 2785.
This is the first real challenge for bulls today but a break higher can take us up to 2802/04. This will be
tricky as there is solid resistance here and sellers will try to put a lid on prices for today. However a
break above this level is always a possibility and would see bulls charge on for 2820/22. This level
represents a very good opportunity for fresh sellers to jump in and establish short positions for a move
lower once again.
If 2736 fails to hold the downside we could see a test of last week's low of 2728. A break below 2720 is a
problem and should see us sink to good support at 2705/06. Expect buyers to be out in force here with
renewed confidence to look for a good short term bounce. Only a break below 2702 will be of concern.
