Dax Technical Analysis 19/01/2017

Hello traders!

So close to breaking out of the range again!

The 11530 – 11630 range has dominated price action for some time now and a question has been appearing in my mind about what ‘phase’ is Dax in, are we in a period of re-accumulation and therefore perhaps waiting for another bullish break, or are we in a period of distribution and perhaps waiting for a bearish break.

We printed a pretty strong bullish candle after a significant looking bullish rejection candle the previous day, but despite that, the daily candle pretty much only extended from the bottom of the recent range 11530 to close to the top 11623. Today we have started the retracement of yesterday’s gains. If this intra-day retracement continues, but we remain bullish, we could find an opportunity to buy in the retracement zone, stops somewhere under the recent lows and targets being the top of the range or a breakout.

For bulls: a fib retracement of yesterday’s bull candle give us a potential buy zone between 11565-11580, just be aware of the event risk today. We have broken below the daily pivot (at the time of writing) and the daily S1 is around the same level at the 50 hour EMA which is also similar to the 61.8% retracement of yesterday. For bears: 11630 was a range high, so we tagged that already this morning, perhaps wait for another test. I appreciate many bears are wondering why on earth we are bullish when there is an almost imminent collapse of the financial markets looming, whilst there may be some truth in that, the event to trigger that collapse is yet to happen and may not happen for a little while. For now, technicals should suffice.

For bears: 11630 was a range high, so we tagged that already this morning, perhaps wait for another test. I appreciate many bears are wondering why on earth we are bullish when there is an almost imminent collapse of the financial markets looming, whilst there may be some truth in that, the event to trigger that collapse is yet to happen and may not happen for a little while. For now, technicals should suffice.

There is event risk today, we have plenty of ECB announcements (interest rate announcement and press conference – ECB Thursday) and there is also plenty of USD (initial jobless claims and Janet Yellen). I won’t speculate on outcomes today. The market may also start to quiet down later in the session as it waits for the Inauguration of the President Elect.

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Yesterday we had a nice little trade:

The Trading Exchange, [18.01.17 08:50]
DAYTRADE BUYLIMIT #GER30 @ 11550.00 | SL:11530.00 | TP:11630.00 | 2017.01.18 08:50 (GMT) | ID 60156705

The Trading Exchange, [18.01.17 16:40]
CLOSE DAYTRADE BUYLIMIT #GER30 @ 11591.90 | PROFIT: 39.97 PIPS | 2017.01.18 16:41 (GMT) | ID 60156705

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