Dax Technical Analysis 05/04/2017

Good morning traders!

My picks of the stories over the last 24 hours:

North Korea fired a medium-range ballistic missile into the East Sea, which drew concern from South Korea and Japanese officials, with Japan stating that the launch was an extremely problematic action. WTI crude futures extended on gains above the USD 51/bbl level following the drawdown in the latest API crude inventory report. Gold (-0.1%) prices were uneventful. Richmond Fed President Lacker (Non-Voter, Hawk) said he is resigning effective today after improperly disclosing confidential information to Medley.

We were in a bit of a stalemate situation yesterday on the Dax. We moved in a fairly compact 70 point range and gained just 0.07% on the day, after starting the day bearish, reaching a low around mid-morning and then recovering all losses, posting the slightest of gains. We currently sit on the daily S1 (pivot point indicator) and have printed bullish divergence intraday, suggesting an opportunity for buyers to come back in. Let’s watch that setup play out.

Looking on the hourly chart (below) I have marked out two Fib studies, one is a retracement using the 27/3 low and 31/3 high which gives a retracement zone of approximately 12095 – 12150. I have also drawn an extension using the 3/4 high, then 3/4 low and today’s high which gives an extension target of 12118. So in summary, there is a confluence between previous support/resistance and these two Fibonacci studies and so I am interested in waiting for the price to reach that area before going long. This view would also be in line with wave traders’ views.

If that move towards 12118 plays out, then I think a decent break below 12191 can provide a shorting opportunity down to those levels. However, the price could just as easily hold the 12191 support and build from there, so I am reluctant to short especially when ECB’s Liikanen stated that the ECB have highlighted that interest rates will stay low beyond the end of asset purchases and that this was undisputed. Hardly a hawkish statement is it?

The algo remains bullish.

In other news, I am creating an affiliation with IG and moving away from FXCM. For any trader interested in opening up a new IG account (which is regularly traded), using my referral link, there will be a complimentary subscription to the DaxTrader signal service (depending on the account size and trading frequency, it will be either the Premium service or the Gold service). More details will follow over the coming days and weeks. To register your interest, please send me a message on Telegram to @daxtrader.

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If you’re interested in receiving live trading signals for the Dax, come and join the community. Three months of signals will cost £94 and can be purchased using this link: https://www.paypal.me/DaxTrader54/94 . In the meantime come and join my broadcast channel on Telegram messenger, it’s here that I broadcast additional Dax analysis and messages to my readers and subscribers. For the rest of the month, it is very easy to get access, please download the Telegram messenger (from www.telegram.org) and then click this link: https://t.me/joinchat/AAAAAEAypsW3Xet_6ngBlw

Dax Support & Resistance

Dax Charts

03 H1 Dax Chart

05 Dax m5 Chart