Indices Surge. Show Must Go On

Indexes ended the sideways trend that was present on the charts since the beginning of July. From the technical point of view all is ready for a new bullish wave aiming new all time highs.

DAX reversed with a nice iH&S pattern, which was created on the important support (12350). The neck line of this formation was in the same time recently broken up trendline. That explains why the breakout was so strong and gave additional momentum for the buyers. Currently the price undergoes a correction but the sentiment from yesterday should be continued, at least in the mid term.

SP500 was in a slightly better condition. Here we bounced of the up trendline along with the 2405 support (slightly above). Price broke the dynamic resistance and should make the new highs soon.

US Dollar Index tested lows from the end of June. Not a surprise as that what the trend was and that what the trend continuation patterns suggested us. As long as we stay below the mid-term down trendline and the lower line of the descending triangle, the sentiment is negative.

This article is written by Tomasz Wisniewski, a senior analyst at Alpari Research & Analysis