The DAX is trading in a Wave IV pullback and has reached uptrend support for the second time this year, says Tony Sycamore, Director of Australia-based TECHFX TRADERS, who remains uncertain whether a bounce will occur.
Sycamore points out the DAX has been trading in an uptrend since the February 2016 low (see Weekly Chart), but in recent weeks it has twice met uptrend support, now at around the 11800/750 level, and failed to bounce off it convincingly (see Daily Chart).
Sycamore says the 11800/750 level is also notable because the 38.2% Fibonacci retracement of the 2016 to 2018 uptrend is not far below at 11720. As such, he still thinks a bounce is possible, to 12600 in the first instance, perhaps signalling the end of the Wave IV pullback. However, if the DAX closes below 11700 he says the next downside target is 11150.