The index has managed to increase and now is pressuring a crucial dynamic resistance. A valid breakout above the near-term resistance will signal a potential upside movement. It remains to see what will really happen because another rejection or a false breakout will send the rate down again and most likely we’ll have a significant downside movement.
You can see that the Dow Jones has failed to reach and retest the lower median line (LML) of the ascending pitchfork, so the current increase is natural. Only a valid breakout above the downside 50% Fibonacci line will announce a further upside movement.
Technically, the perspective remains bullish as long as the rate stays above the LML, but you should be very careful because a false breakout above the 50% Fibonacci line will send the rate below the LML. A larger downside movement will be confirmed by a valid breakdown below the outside sliding line (SL1) of the ascending pitchfork.
DAX slipped below the first warning line (wl1) of the ascending pitchfork and could drop further if it will continue to stay below this broken line and below the upside 50% Fibonacci line of the descending pitchfork.
You can see that the index has made several false breakouts above the upper median line (UML) signaling that this line represents a very strong dynamic resistance. Price failed to retest the UML in the last attempt, so it could approach the ML in the upcoming days. You should know that a failure to reach and retest the ML will announce a potential upside momentum on the short term.
A valid breakdown below the ML will be favored if the rate will pressure it and if it will stay right above it for a couple of days.
The index approaches the 2872.87 static resistance and the median line (ML) again. It remains to see what will happen when the rate will reach these two crucial resistance levels. Only a valid breakout above the median line (ML) and above the static resistance will confirm a further increase towards fresh new highs.
You should know that a false breakout above the mentioned levels followed by an aggressive drop will invalidate a further increase and will signal a potential corrective phase if it will make a valid breakdown below the downside 50% Fibonacci line.