Two trades to watch: GBP/USD, Dax
Fiona Cincotta February 22, 2021 6:54 PM
GBP/USD trades above 1.40 on lockdown easing optimism. Dax slips lower ahead of IFO business sentiment data.
GBP/USD above 1.40 on lockdown easing optimism
Where next for the Dax?
After a firm rally at the start of February, the DAX formed a double top pattern at 14184 in the second week of February. The reversal pattern saw the Dax sell off, however it failed to meaningfully break through support at 13900.
Long wicks below this level indicate some weakness in the bearish moment. That said the Dax trades below its 50 & 20 sma. The 20 sma also crossed below the 50 sma in a bearish signal and the RSI is supportive of further losses.
A convincing move below 13900 is needed to test support at 13850 last week’s low. A break through this level could see bearish moment gain traction with a deeper selloff to 13590.
Any recovery in the price would need to overcome the 14000 the 50 sma and round number before he bulls look back towards retesting the all time high of 14184.
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