On the daily chart the index DAX30 has been in the downward channel since December 2015. Sharp decline in European stock indices and the rise in Euro was caused by investors’ disappointment that ECB did not introduce strict measures to expand QE program in Eurozone. The index has lost 2720 points declining from the level of 11410.0.
However, the price index managed to go up above the level of 9440.0 (Fibonacci 23.6%), which is crossed by the upper line of the downward channel on the daily chart. On the daily and 4-hour charts the indicators OsMA and Stochastic give sell signals. In case of the decline below the level of 9440.0, the price will go to the downward channel with the bottom limit near the level of 8450.0. From the technical point of view short-term upward correction can continue up to resistance levels of 9600.0 (ЕМА144) and 9750.0 (ЕМА200 on 4-hour chart and ЕМА50 on the daily chart) and 9810.0 (Fibonacci 38.2%).
If European Central Bank expands QE program at the meeting in March, the correction can turn into uptrend. However, as a rule the efforts of the Central bank only might be insufficient for changing dynamics of the world financial markets and eliminating instability in the world of finance.
It is likely that despite sharp rise, upward correction will shift to downtrend, which will continue in the financial markets in the medium-term.
In this case, the target of decline will be the level 8450.0, the bottom limit of the downward channel and the level of 8360.0, the lows of September 2014.
Support levels: 9440.0, 9400.0, 9300.0, 9150.0, 9100.0 and 9000.00.
Resistance levels: 9600.0, 9750.0, 9810.0, 10000.0 and 10050.0.
Sell Stop: 9450.0.
Take-Profit: 9350.0, 9300.0, 9150.0, 9100.0 and 9000.00.
Buy Stop: 9540.0.
Take-Profit: 9600.0, 9700.0, 9750.0 and 9810.0.