The German DAX continues to push higher and is now challenging the previous highs. While the current choppy recovery suggests that the upside move may not be finished yet, traders should remain cautious as the potential upside could be limited.
Looking at the latest price action, the structure increasingly resembles an ending diagonal a.k.a. wedge pattern. In this scenario, DAX would now be trading within the final wave five of this wedge formation, meaning that the remaining upside could be part of the last stages of the advance.
Important resistance is located around the 26,200–26,500 area, where the index could complete an ABC formation within the final fifth wave higher. If this scenario plays out, we could see a slowdown and a larger corrective phase after the pattern fully matures.
For now, momentum remains positive, but the current structure suggests that chasing the upside at these levels carries increasing risk, especially as price approaches the projected resistance zone.
Looking at the latest price action, the structure increasingly resembles an ending diagonal a.k.a. wedge pattern. In this scenario, DAX would now be trading within the final wave five of this wedge formation, meaning that the remaining upside could be part of the last stages of the advance.
Important resistance is located around the 26,200–26,500 area, where the index could complete an ABC formation within the final fifth wave higher. If this scenario plays out, we could see a slowdown and a larger corrective phase after the pattern fully matures.
For now, momentum remains positive, but the current structure suggests that chasing the upside at these levels carries increasing risk, especially as price approaches the projected resistance zone.
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