Dow Jones, DAX 30 Technical Forecasts: Major Trendlines in Focus

Dow Jones, DAX 30 Price Outlooks:

Dow Jones Forecast

Outlook: Neutral

The Dow Jones tumbled into a bear market last week and took out a series of trendlines and psychological levels in the process. Closing at 23,185 on Friday, the index is narrowly above a major supportive level that dates to 2009 when the market was beginning its record-setting bull run that ended just last week.

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Going forward, the level will likely serve as a sort of “line in the sand,” looking to stand in the way of further losses. To be sure, an extension beneath the level will open the door for more selling as the Dow Jones falls further beneath the 200-week moving average. That being said, the current market climate has given major levels little respect as fear reverberates throughout markets.

Dow Jones Weekly Price Chart (2009 – 2020)

To the topside, the psychological 25,000 mark has emerged as an area of price indecision. Therefore, it could offer modest resistance in the week ahead should bullish price action emerge. Meanwhile, follow @PeterHanksFX on Twitter for updates and insights.

DAX 30 Forecast

Outlook: Neutral

The DAX 30 has employed the assistance of a similar trendline. The level also originates from 2009 and it helped to buoy price in 2011, but a significant venture beneath the line last week has likely reduced its efficacy going forward. Therefore, from a purely technical perspective, the DAX appears more vulnerable than the Dow in the week ahead.

DAX 30 Weekly Price Chart (2009 – 2020)

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Either way, both indices will have to grapple with the unprecedented fundamental developments that have occurred, and IG Client Sentiment Data would suggest both are susceptible to further losses.

–Written by Peter Hanks, Junior Analyst for DailyFX.com