Dax Technical Analysis 15/03/2017

Good morning traders!

GBPUSD has reclaimed 1.22 and there have been a few pieces of news around UK politics, Nicola Sturgeon’s referendum plans are not working out as expected. The Bank of England should be prepared for a UK interest rate rise next month, according to a shadow monetary policy committee. USOil is my current commodity trade which is open at the moment and with inventories being unexpectedly drawn down overnight, we have found support at $48. Today we have the FOMC, so watch your dollar pairs and expect some slow down into the release later this evening.

Regarding the Dax, it was another relatively quiet day in terms of price action, with under 100 point range in the daily candle. I made three trades yesterday on the Dax using my automated trading algo, (two stop losses and a win). The algo managed to pick the entry at the bottom of that sharp sell-off that occurred during the day, so congratulations to all who followed that one.

The Trading Exchange, [14.03.17 07:32]
DAYTRADE BUY #GER30 @ 12000.45 | SL:11987.43 | TP:12031.38 | 2017.03.14 07:32 (GMT) | ID 61427599

The Trading Exchange, [14.03.17 08:00]
CLOSE DAYTRADE BUY #GER30 @ 11987.15 | PROFIT: -12.82 PIPS | 2017.03.14 08:00 (GMT) | ID 61427599

The Trading Exchange, [14.03.17 08:11]
DAYTRADE BUY #GER30 @ 11987.70 | SL:11959.14 | TP:12054.02 | 2017.03.14 08:11 (GMT) | ID 61428798

The Trading Exchange, [14.03.17 12:10]
CLOSE DAYTRADE BUY #GER30 @ 11959.10 | PROFIT: -27.57 PIPS | 2017.03.14 12:10 (GMT) | ID 61428798

The Trading Exchange, [14.03.17 12:32]
DAYTRADE BUY #GER30 @ 11942.15 | SL:11891.72 | TP:12061.76 | 2017.03.14 12:32 (GMT) | ID 61433832

The Trading Exchange, [14.03.17 13:14]
CLOSE DAYTRADE BUY #GER30 @ 11993.15 | PROFIT: 49.11 PIPS | 2017.03.14 13:14 (GMT) | ID 6143383

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Dax Daily Chart

The bearish divergence from the end of February is still the active signal on this chart at the moment. Price has struggled to get a foothold above 12065 and the attempt this moment to climb above the high of yesterday was swiftly rejected. Speculators have been assessing the risks of an FOMC rate hike on the equity markets and many now believe that the hike is inevitable, so perhaps the market has digested it already. However, as an interest rate increase makes lower risk investment options more attractive, you could easily see an outflow from equities into alternatives, perhaps starting the change in risk sentiment.

A break above the February high is still something I am watching for, alternatively a break below 11700 (which is currently the trend defining level)

01 Dax Daily Chart

Dax Hourly Chart

Yesterday we tested the support zone with a rapid (relatively unexplained) sell-off and equally quick recovery. We did not manage to pierce the support and once more it held above the 50% retracement level that has been marked out on this chart for the last couple of weeks. So our narrow range of 85-100 points continues. Watch for a break below 11915 or a break above 12075.

03 H1 Dax Chart

Dax Intraday Chart

We are still oscillating around the 50 period EMA, comfortably inside this Bollinger band and currently in between the daily pivot and the daily R1. You can see the dip and recovery in the early afternoon on this chart, which was a great opportunity to go long. But at the moment, it seems we are slowing down into FOMC.