In the last 9 sessions DAX decreased for 7 times. All together German index lost almost 10%. Bearish trend is confirmed by volume, which was much smaller during bullish sessions. On Friday price reached to fibo 50% of last bullish wave.
If DAX is right now in wave 2 then decrease should be stopped at 10,000-10,120 area which is strong support area and fibo 61.8%. If this level also will be broken the most probable is that depreciation will be stopped at 78.6% in 9,750 pts area. If price will go lower, it will mean that we should wait for new low on DAX.
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Till Wednesday we can expect much volatility and emotions on the markets. On Monday at noon there will be speech of ECB President Mario Draghi. On Tuesday there will be last US data before Wednesday’s FOMC. If FED will hike interest rates, it can be the most important decision of the year for financial markets. Almost 80% of analysts expect that first hike in 9 years will finally happen.
In the period mentioned above MDAX lost 7% and broke support which stopped decreases for 1.5 months. We have to remember that index set new historical high on December 1st and DAX was still 1,000 pts from it. So it is more probable for MDAX to end correction soon and go back to gains.
