Hello, everyone! This week, we’re diving into the DAX and its long-term trends. Looking at the quarterly chart, each candle represents three months, giving us a broad perspective all the way back to 1980. The trend is clear—DAX has been moving within a well-defined channel, respecting key support and resistance levels.
The green shaded area at the bottom has consistently acted as strong support. Every time the price touched it, the market bounced back. On the other hand, the red shaded area at the top has only been tested once, making it a critical resistance zone. Right now, the DAX is moving within the gray shaded zone, a middle-ground area that often acts as both support and resistance.
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Zooming Into the Weekly Chart
Switching to the weekly chart, which gives us a closer look, we see a similar trend. These trend lines have been respected since mid-2022. The green trend line has been a strong support zone, while the red shaded area has served as resistance. The latest price action shows that the DAX was rejected at this red zone, which could mean resistance is kicking in again.
Interestingly, back in 2021, the DAX also reached the gray shaded area from the quarterly chart and was rejected afterward. Now, history could be repeating itself, as we are at a similar double resistance—both from the quarterly gray zone and the weekly red zone.
What the Daily Chart is Telling Us
Looking at the daily chart, we can see a clear reaction to this resistance level. The last time the price hit the red shaded area, it was strongly rejected, leading to a noticeable pullback. Given this recent price movement, we could expect further downside pressure.
With resistance coming in at multiple levels, it’s going to be very interesting to see how the DAX reacts in the coming weeks. If the index fails to break through, we might see a pullback or consolidation.
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