Testing its 50MA once again today, fall below could test 18,230-18,250

The Dax is back to testing this trendline support after testing its 50-day moving average in yesterday’s session. The German index tested the 50MA with a positive finish towards the end of the day, however, the sell-off today has led the index back to key support territory. Currently, the index is trading at around 18,365 in the European session. The index is actually trading below the trendline support of 18,395, a close below it would suggest that further downside is possible. In that scenario, the following key area of support would be 18,230-18,250, which was the breakout point back in April leading to the rally to all-time highs in May. It would be unreliable to point to any resistance levels as of right now as the near-term bias is shifting towards a bearish outlook. However, more insight will be available after this week depending on where the index will close. Looking at the technical indicators, they continue trading on the negative side of the spectrum. The MACD is declining and the RSI has faltered to negative territory, reading 41.