DaxTraders did not like the drop in new orders in German industry for June. The drop was much stronger than expected and many analysts still quote the trade dispute as the main cause for the fear of German companies. There is no doubt that the trade dispute has inhibited the risk appetite, but it is becoming a scapegoat for any negative price action.
The day provided plenty of opportunities, as the video will demonstrate below, but right in the middle of the day was a 180+ point mountain. I imagine that many traders were left trapped as a result. The mountain refers to the shape of price action and this particular pattern is often a ‘wash and rinse’ of a resistance level. It is true in this case. The resistance level that got ‘washed’ was the centre line visible on the 60m chart. Now we should watch to see whether we are able to break yesterday’s high. If we CAN break it, then the likelihood is that we continue the bullish trend. If we can NOT break that high, then it’s likely that we will continue to put pressure on the trend defining level to the downside.
I share a number of strategies with members in the forum and these strategies provided plenty of signals yesterday. Take a look at the video to see some examples of those signals. I will not share the conditions or the rules of those strategies, but you can have those as a member.
We are still range bound and at the moment, there is nothing exciting about the Dax. Commiserations to any other Renko traders at the moment, because these kinds of conditions are like our nemesis. The range we are stuck between is 10650-10750. In one way I am pleased that we have held above 10650 because it’s possible that this will become the new shelf or foundation, the new support level, from which price can build and right now I still remain bullish. I am wondering whether we are just coiling up waiting for the ECB outcome. Will they do nothing? Will QE purchases increase over the next few months after a slower August? All eyes on the outcome tomorrow!
RSI on the daily chart is now overbought, which doesn’t necessarily mean anything, but suggests that selling signals are now likely to be seen as more significant. At the moment we do not see a selling signal on the daily chart, but we are aware that being overbought, at a major resistance level, provides excellent conditions for these signals to emerge.