Both DAX and S&P500 improved their technical situation, but the hardest tasks are still ahead. Last week there was FED president Jannet Yellen speech which was more hawkish than expected. Yellen said that inflation will reach target in the next few years and there is a possibility of hiking rates in the next few months. Markets are not scared of these words and S&P500 ended week above important resistance at 2,100 pts. A lot of will depend on Friday’s US job report.

New week started from free day in US and UK, so the volatility on the markets will be small.

S&P500

Weekly chart

2,040-2,020 pts support finally caused a rebound and index came back to gains. Weekly candle is really impressive and it covered last four weeks weakness. Index reached really strong resistance at 2,100 pts. As we can see at chart below this level is stops bulls for months and only fixed break of this will start new bullish impulse.

Daily chart

Pin Bar showed bottom of correction and after that index started to grow. On the D1 chart we can see breaking of upper band of bearish channel. Now it can continue bullish impulse.

DAX

Weekly chart

Major breakthrough also over here. Inside Bar which was stopping the price for two weeks was broken. Friday’s session ended on 10,286 pts and it should also manage gains in the area of strong resistance at 10,500-10,800 pts. This level is strengthen additionally by upper band of bearish channel in which DAX moves for more than a year.

D1 chart

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German bulls managed to stay inside bullish channel and break resistance at 10,100 pts. Current target for bulls is at 10,500 pts and the new support is at 10,100 pts. Situation on DAX is not so clear and positive as on S&P500. Area mentioned above can stop bulls for a longer time but thanks to the correlation between German and US index it will be easier to break.