10440 just got stronger today

Tomasz Wiśniewski

Chief analyst at Alpari Research & Analysis

Closing the gap from the last weekend – that is all what the buyers can do for now and, to be honest with you, this is not a surprise as we are beneath a very important resistance. 10440 seems like a bearish stronghold for now; fortified with recent price movements since the beginning of August and two Fibonacci levels: 23.6% long-term uptrend and 38.2% short-term downtrend. Tuesday's session was very important for the mid-term situation as, from a price action point of view, we do have another strong bearish bounce increasing the meaning of this resistance and showing the local bullish weakness.

Fundamentally, weak CDU results and Deutsche Bank troubles are definitely not helping here. The DAX is weaker than the American indices even when US traders have to face increases in interest rates and Europeans can buy shares in an ultra-low interest rate environment which, as we know, is promoting a bullish appetite for shares.

As long as the price stays below 10440 points, the sentiment is bearish. When the price comes back above this level (which is less likely for now), investor should think about abandoning their bearish approach and start to buy again.

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