Dax Technical Analysis 05/09/2016

Good morning traders!

I trust you all had a good weekend, for those parents among us, certainly in the UK, I imagine it’s been a busy one getting all the preparations ready for the kids going back to school this week as September is here already.

My bullish bias was rewarded on Friday with a decent break, and hold, above 10650. I opened three trades to build up a fairly big position on Friday, eventually deciding to close two of them out to keep my risk under control, however the trade came in and I managed to take +164 points, which got me and the signal subscribers off to a great start. The main reason behind my bullish bias is that easy monetary policy is likely to remain for the medium term as I believe growth prospects are not looking great and ECB are likely to extend the QE program. Also US are probably unlikely to increase rates further. The Friday jobs report certainly gave my trade a boost with an underwhelming 151k print.

I currently have no manual trades open, but I am looking for longs.

I currently have no algorithm trades open, based on my renko system, as price is currently short-term ranging. (Correction: it just shorted at 10711 around 8:45)

Dax Technical Analysis

Suppport & Resistance

KEY LEVELS
Daily R2	10867
Daily R1	10791
Daily Pivot	10652
Daily S1	10576
Daily S2	10437
200 Day EMA	10181

Daily Chart

The daily chart is approaching a double top and 10800 is the key resistance at the moment. The Friday candle was strong and close above the recent range, so a reaction to this will be interesting to watch, because a pullback may tempt me to go long.

01 Dax Daily Chart

Four Hour Chart

The trend is still intact here and only a break above 10800 and a hold above 10450 will see this trend continue.

02 Dax H4 Chart

One hour Chart

Heiken Ashi (smoothed) on the 1 hour suggests a bullish bias.

03 H1 Dax Chart

30 Minute Chart

My pullback area is a test of the 10650. I am interested in going long from somewhere down there as we are a bit stretched at the moment. I will want to protect the trade in case the setup fails by having a fairly small stop loss.