- DE30 lower today after hitting 1-month high yesterday
- The market failed to close above key resistance at 12340
- 12255 the neckline in a possible head and shoulders reversal formation
Yesterday saw the DE30 build on its prior gains so far this week, but the market crucially failed to close above a key level at 12340. This has previously been an important level and the outlook for bulls would become much more favourable if the market can record a daily close above 12340.
12340 remains a key line in the sand on a longer term basis. Source: xStation
However, should price fail to move above 12340 then a reversal could be in the offing. There is a possible head and shoulders reversal signal forming on a H1 chart with the head coming in at yesterday’s high of 12364. A second shoulder appears to be shaping now and if price falls below a potential neckline at 12255 then the setup would be validated. Should the setup play out in a textbook fashion the target would be at 12145.
A head an shoulders reversal formation could be taking shape on H1. Source: xStation
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