German Dax Bouncing off Support, as Stock Markets Reverse Higher - Forex News by FX Leaders
The 100 SMA is under threat now

German Dax Bouncing off Support, as Stock Markets Reverse Higher

Posted Friday, October 23, 2020 by
Skerdian Meta • 1 min read

Stock markets have been trading on a bullish trend since March, following the crash due to the coronavirus panic in previous weeks. During the uptrend, the 20 SMA (gray) and the 50 SMA (yellow) were providing support for the Dax, holding on pullbacks and pushing the price higher.

For the Dax, the peak was reached on September 3, but the bearish reversal took place later that month, as MAs were still holding until the middle of last month, when sellers took over and moving averages were broken. But the 100 SMA (green) turned into support on the daily chart, at 12,350 points.

Then, the price bounced back up, and the 100 SMA continued to hold as support until Wednesday. The Dax pushed below that moving average on Wednesday, but the previous support at 12,350 held once again, and yesterday the Dax started bouncing off that level.

Now, the price is trading around 400 points higher, so it seems like buyers are back in control. Although, the confirmation of the bullish reversal will come if today’s candlestick closes above the 100 SMA, which is being challenged now. If the Dax closes above the 100 SMA today, that would be a signal that the retrace is over and the bullish trend is back on.

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About the author

Skerdian Meta // Lead Analyst
Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.
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