Dax Technical Analysis 20/09/2016

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Hello traders!

So after the lower low we posted on Friday, we started off the week with a mini-bounce yesterday and resumed the momentum this morning adding weight to that Bullish Divergence signal I posted. We are just above the daily 200 EMA and price is pressing down on that support zone from the daily chart and volume in picking up. That support zone could act like a spring, and we know what happens when we push a spring down… If 10450 goes, you could argue that we have started a reversal or at least the bearish trend has finished.

On the 30 minute chart, price is still (barely) inside a bearish trend channel although it is right at the top and threatening to break out to the upside. All the oscillators are pointing to overbought, so perhaps there’ll be a pullback or a bit of consolidation before the break out? The bullish divergence setup is still in play.

On the 5 minute chart, price was bouncing between the 0.382 and 0.618 of the swing on 16/9. In fact it was trapped between those two levels for the whole day, making trading yesterday very boring for a trend trader. It was not until this morning that this range was broken and we are now already at the daily R2 (pivot point indicator).

Targets to the upside: 10,500, but stop loss would have to be so big, that it’s not providing much or a reward:risk ratio.

Wait until the the BoJ and Fed announcements are made and keep your powder dry.