The German DAX rose above the important bearish trend line on Monday, which cancelled the immediate downward trend and the DAX posted a strong daily gain. On Tuesday, it was consolidating and seen to be 0.3percent weaker during the London session, trading at around 11,350 EUR.
The major support is now at the broken trend line, which is currently near 11,300 EUR. As long as the index trades above this level, the short-term trend seems bullish, with the first target at Monday’s highs near 11,400 EUR.
However, if this support cracks and the price returns back to a downward trend, we could see a decline toward 11,180 EUR and possibly to the current cycle lows at 11,050 EUR.
On the upside, if the 11,400 EUR resistance is taken out, the price might reach the psychological level of 11,500 EUR.
On the daily chart, there is a bullish divergence between the RSI indicator and the price, which may support the current bullish breakout and possibly further gains.
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