Dax Technical Analysis 06/12/2016

Hello traders!

The Dax treated us to a pretty spectaculor day yesterday, with a 300+ point candle off the back of the EU political uncertainty surrounding the Italian referendum. Depending on which camp you sit in, the news was damning for the Eurozone with yet another Anti-Establishment vote as Renzi’s plans were rejected opening the door for ‘Big Beppe’ to come and cast further doubt on the future of the EU. I think to be honest most of the markets were expecting the Italians to reject Renzi, so yesterday was perhaps an opportunity for traders to really take advantage of the lower priced Dax.

On the daily chart we are hovering around the 10700 level once more, which at the the top of this large range, it’s a previous area of supply so although the candle yesterday was strong and be bring some momentum, we could see some resistance on the way to 10800. Will we finally see the break of 10830? Will the Dax finally close some of the disparity between its current levels and the All Time Highs seen across the Atlantic.

On the H4 chart we are above the median line and comfortably inside the Bollinger band with the oscillators approaching overbought conditions. The resistance zone is 10750-10800 and I have marked out 10570 as a potential balance point, this may provide an interesting opportunity to go long.

On the H1 chart we are currently trapped right in the middle of the Buy Zone and the Sell Zone. We broke below support yesterday and threatened to create a great setup to short, however we bounced fairly agressively and retraced back inside the range. There has been a large volume of trades taking place in this range, so being back here suggests further indecision. I am now looking for price to continue and break through the other side.

On the 5 minute chart we were in a channel yesterday until around mid-afternoon, infact it was more a bull flag and the channel broke to the upside. We are now inside a new bullish channel so we can now wait to see how that plays out.