Up 1% on the day

Dax40 is currently up more than 1% on the day, trading at around 18,366. The index has been moving sideways for the past week, so it could be argued that a potential bear flag is forming on the daily chart. Though this would only be confirmed if a move below the support of 17,949 occurred. The near term support reads 18,100, which is along the small supportive trendline. A move below this level would shift the focus to the already mentioned level of 17,949. Towards the upside, we can see the index is currently challenging the resistance of 18,357, but only a close above it would indicate further possible upside this week. With markets awaiting the US inflation data, this market could be influenced by the overall market sentiment. A close above 18,357 would allow the bulls to eye up the area of 18,500-18,600 going into July. The technical indicators seem interesting, more in favour of the bulls. The MACD looks to be turning positive and the RSI is edging higher as it reads 51. Quite the similar positioning when comparing to April, the index pulled back before continuing to rally higher. So far, a higher low is in place, hence, another leg higher cannot be ruled out but caution should certainly remain this week.