Yesterday we noticed that the DAX index price action did not make much progress to the downside. There was a downside attempt, but no significant downside momentum. The DAX found responsive buying, and recovered back to an area of balance.
The monthly composite point of control is currently 13 140. This suggests there is demand at that level. Sure enough, this morning we have seen an ignition from that 140 zone.
I previously spoke about a potential downside move to find the ACR line set target. See the article and the video from yesterday from more about that. However, it seems that the idea may be on hold for the moment.
The DAX trend remains directionless at the moment. With responsive buying at the transport, and responsive selling at range resistance.
22-11-2019 DAX Analysis on the 10-minute chart
The chart below uses a RAFF regression channel tool. Regression is used heavily in statistics for drawing lines of best fit. A regression channel adds parallels to that line of best fit. I have used the two points highlighted by the green boxes to draw the channel.
Notice how price action broke above channel resistance and broke below channel support by an equal amount. Although after all of that, the price is now back in the middle of the two.
When the price is trading in a range like this, it’s common to fade the highs and buy the lows.
22-11-2019 DAX Analysis Video
See the technical analysis video from this morning’s webinar below. During the video, we looked at previous days price action. We discussed how price filled out the low-volume area of Wednesday. This morning, the market broke above yesterday’s high (during the Asian session). After the break, we see a swift retracement back towards the point of control. However, the point of control missed and price ignited from this point around the European open. The market seems to have made a statement by breaking above the overnight high that we have initiative buying in the market. Demand is still strong.
Follow the Twitch channel: twitch.tv/thedaxtraderWatch 22-11-2019 DAX Analysis – Responsive Buying turns to Initiative Buying from thedaxtrader on www.twitch.tv
22-11-2019 DAX Key Levels
|Point of Control||13131|
|Value Area High||13168|
|Value Area Low||13101|
November PMI releases in the US and the euro area, including Germany.
Recent further increases in indicators such as ZEW and Sentix seem to support a trough view. However, external demand is still the main driver of the euro area manufacturing sector and that’s still hit by global political uncertainties.
New ECB President Lagarde will give a key note speech which may reveal more about her view on the euro area economy and monetary policy. China invited US trade negotiations. The ECB meeting minutes from October confirmed that the ‘patience, prudence, persistence’ mantra is back. Let easing work its effect on the economy.
Use the DAX chart tool to find news releases and the economic calendar