The DAX index seems to be headline towards a possible top formation and is at risk of reversal. The US economic condition seems to be putting pressure on the US stocks, and with talks of a possible recession, things are not looking great for the DAX index.
And if we look at the technicals, the 200 MA (Daily) is also presenting a major challenge for the markets. In general, the index is very close to the 200 MA, which can lead us to a possible pullback. So if this pullback in DAX actually happens, it will bleed a few hundred points at least before forming a base. But besides the 200 MA, there are not many significant technical levels which are important enough to mention here.
And if the bear market takes hold in 2023, then once again, Dax will be playing a huge role in it in one way or another. Furthermore, the possibility of touching the September lows is also on the cards somewhere in the future.
But on the flip side, if Dax manages to cross the 200 MA with relative ease, then the next resistance will be 13947 (summer highs). But given how the market sentiment regarding the stocks is negative, that would be highly unlikely.
As for CAC 40, it is sandwiched between the summer high and the 200 MA (Daily). However, if the DAX index declines, then the CAC 40 will also follow the same movements.
The nearest support of CAC 40 is at 6328 near the 200 SMA (continues to move down). And on the top side, the important level to watch is the 6608, which will serve as an important resistance to any bull attempts.
So, in short, Dax may be forming a top and will most likely reverse from its current levels. Similarly, the CAC 40 will also follow suit and go in the same direction as the DAX index. As for the movements towards the upside, the chances of that happening are highly unlikely.