Dax Technical Analysis 15/06/2016

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Good morning traders!

So when’s the pullback coming then? We have been selling for a few days now and like most markets, you’d normally expect some kind of relief before the next wave. So although the Dax arguably does not perform like most currency markets, regarding respecting certain technical studies, it still does pullback. Does it begin today?

Fundamentally, there is some expectation of a higher cash value today (Lang & Schwartz) with various stocks expected to perform much better including Volkswagen, Kuka, Daimler and RWE. Later on we also have FOMC economic projections, the Fed Inter Rate Decision (unlikely to see a hike) and the monetary policy statement too. So there is some potential for volatility, but the picture still remains. Brexit uncertainty and US election uncertainty. Oil has relieved some pressure though. The uncertainty allows traders to favour further downside with more confidence.

Technically, we have poor risk:reward to target any shorts at the moment and we are seeing a volume spike on the daily chart as we edge nearer to Brexit, (I still contemplate the look of the EU if Britain leave, yes it’s a small country that punches above its weight, but if we go, and others start to follow?), could this be considered stopping volume as we are near major support? We are under the daily 200 EMA and below the kumo cloud, so traders will still be preferring short setups.

Potential pullback zones; previous support of 9750 is a first level to target, beyond that 9900 could be interesting (also a 50% retracement of the recent swing) and 10000 is the next major level beyond that. We have created a double bottom (perhaps even triple) just above 9500 and a break above 9636 could confirm we have broken the short-term technical downtrend, currently the R1 for today. If we do get a pullback, it could run for a couple of days before we turn lower again.

Short Targets; 9440 on a break below 9500, not great risk:reward right now considering we are so stretched.