Dax Technical Analysis 03/05/2016

Good morning traders!

Fundamentals

The market is continuing to digest the surprise from the Bank of Japan after they decided to stay put at its monetary policy meeting. There is a large amount of column space used up with detailed commentary from high profile economists discussing how the world is at threat from weak demand and even the IMF and others are painting bleak pictures of the global economy especially with the disappointing return from further monetary stimulus.

So the market does still seem bleak, but I do still have to remain slightly positive considering there are some signs of recovery with China for example, regarding metal prices, there are some signs of recovery with the labour market in Japan, and subtle signs of recovery with core inflation in for example US, UK, Sweden and Norway (but not quite the whole Eurozone). Let’s not forget that oil prices were down 47% year on year in February and are now around -27%.

Let’s also not forget that QE is still active

Technicals

Daily chart – longer term we are still bullish, despite the recent momentum to the downside. Price has been wanting to close the gap, left by the early April rally, and has finally reached the first cluster of support just above 10,000 so bullish traders have been looking for a signal to buy. I am personally looking for a Buy Order around 9940 with a stop under 9880. If that fails then it’s possible that we have broken out of the bullish channel and it could open up an interesting trend to the downside.

5m chart – Short term the Dax is bearish and fanning out in a reverse triangle so a short selling opportunity exists with a stop above the high from yesterday or a break out of the wedge formation that is developing around yesterday’s price action.

There could be some interesting trading opportunities very soon. If you want to know more of private Dax Signals sent directly to your phone, via WhatsApp, click here.