DAX: is the index over the precipice?
The German index has been moving in a medium-term downtrend since the beginning of August. Prior to this, the price had been in consolidation for three months. The first sign of weakness was the breaking of the horizontal support near 15 600 points. Currently, the CFD based on this index is just above the next important support. This is the level that coincides with the bottom of March this year and the peak of December 2022.
The contract is also trading within the lower band of the downtrend channel. Just above it runs the internal Fibo 38.2 per cent abolition of the entire upward impulse that started in autumn 2022. This means that a rather strong barrier has been created, which is unlikely to be easily overcome. An upward correction is possible after the recent declines. However, if the level around 14,600 is permanently exceeded, then the way will open up for lower levels. The first target ceiling is around 13 900 points.