The index rose nearly 2% in European auto trading on Monday, supported by weaker Euro and political news from Germany, as German Chancellor Angela Merkel said she will not seek re-election as a head of her CDU party in December.
Reversal signal is developing on daily chart after triple downside rejection last week and today’s bounce, signaled basing.
Recovery generated initial bullish signal on break above 11343 (Fibo 38.2% of 11836/11039), with fresh advance pressuring pivots at 11449 (falling 10SMA) and 11485 (weekly 200SMA) and also to looking to cover last week’s gap (Mon/Tue 11524/11359).
Sustained break here would generate further signal for extension of recovery leg towards barriers at 11531 (Fibo 61.8% of 11836/11039) and 11678 (falling 20SMA).
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Near-term recovery is supported by strengthening momentum and reversal of daily slow stochastic/RSI, with rally above thick hourly cloud (11217/11363) adding to bullish near-term signals.
Res: 11449, 11485, 11531, 11678
Sup: 11363, 11217, 11184, 11039
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