Stock Market Takes A Breather, Euro And Pound Consolidate
The stock market has been taking a breather after the big rally and thus we saw the DAX falling like a stone towards 15100. While this correction was overdue after the latest gains, it will be interesting whether the 15000-support (red dashed line) will hold. If the index drops significantly below that support barrier, we see a lower support zone between 14800 and 14600. Bulls who want to go for 16000 could raise hopes after a break above 15550.
Both EUR/USD and GBP/USD finally refrained from extending their gains towards higher targets and consolidated Tuesday.
GBP/USD: The cable reversed after a test of 1.40 failed to ignite further gains. While the outlook remains bullish in this pair, we might see a deeper correction towards 1.3870 and possibly even 1.38 before bullish momentum accelerates again.
Looking at shorter time frames (hourly chart) we see a head-shoulders pattern suggesting upcoming bearish momentum in case of a break below 1.2015 (red neckline). If 1.20 breaks, we will focus on lower prices between 1.1985 and 1.1950 (rectangle) that could attract more buyers in this pair. This short-term pattern becomes however void with an upside break of 1.2050.
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