Good morning traders, it’s Wednesday the 10th of June and time for today’s German DAX Index Technical Analysis.

German DAX Index Technical Analysis – Review From Last Session

During the last session, we saw the DAX 30 hit a session high of 12918 and a session low of 12502 giving us a range of 416 points compared to the average daily range of 277. At the close of play last session, the market closed at 12627 which was 850 points above the 200EMA and 1242 points above the 50EMA.

German DAX Index Technical Analysis – Where Is The DAX Heading?

The DAX is currently Neutral after an epic rally. A period of digestion and consolidation is expected. We recently broke below a bullish trend defining level, so we remain neutral between 12676 and 12933, so we can either look to fade the two extremes assuming the range trading continues, or wait for a breakout above 12933 or below 12676.

As i’ve said before, the issue with a netural market, is that we can’t really use the DAX trading strategy with much positive expected value (+EV).. 

It’s worth mentioning that the daily DAX RSI reading is currently 82, which is pretty overbought. Although we know that momentum is clearly bullish right now, the buying pressure now has a much higher likelihood of running out of steam. We can still get long, but perhaps we should be cautious entering longs.

My Trading Update

As for my index trading; during the last trading session I took a total of 2 trades, so it was a pretty quiet session (1 DAX trade and 1 FTSE trade). Breaking down my DAX trade, 0 were from the DAX trading strategy (DTI) and 1 was from the regular morning DAX signal. Breaking down my FTSE trade, 0 were from the DAX trading strategy (DTI) and 1 was from the regular morning signal. Overall, I had a total of 1 break-even trade, 1 trade closed early, which gave me a total profit of 1.8%.

To keep a track of the trading results, you can read the dax trading spreadsheet. In order to get access to the signals and to the strategy, you will need to be a member of the site. Find out more about membership.

Important DAX Levels

As for the key levels to watch today, watch out for the previous session Point of Control (POC) at 12611 and the previous session Volume Weighted Average Price (VWAP) at 12665. The value area high (VAH) is currently 12699 and the value area low (VAL) is currently 12556.

German DAX Index Technical Analysis 1

German DAX Index Technical Analysis – Technical Indicators

IndicatorValue
RSI82
StochasticK: 86 and D: 88
MACD OSMA100
Point of Control (POC)12611
Value Area High (VAH)12699
Value Area Low (VAL)12556
The DAX Pivot12683
The DAX R213099
The DAX S212267
Daily 5 EMA12638
Daily 8 EMA12473
Daily 50 EMA11385
Daily 200 EMA11777

German DAX Index Technical Analysis – News

Federal Reserve are unlikely to make significant changes to its policy stance later despite the positive jobs report surprise on Friday. Watch for whether the Fed changes its forward guidance and whether it puts a number on its monthly QE buying. Perhaps it is early to change its forward guidance but maybe Fed will make it more clear what the conditions for rate hikes are. But for now, the Fed are satisfied with its unlimited, open-ended and flexible QE programme so maybe we will be none-the-wiser after tonight.

Equity indices seem be taking a break after the continuous rally since March, perhaps traders see a small tail risk that the Fed does not confirm its dovish stance tonight, especially considering the incredible amount of money they’ve committed to pumping into the system.

In Europe, a lot of focus is on the upcoming negotiations of the recovery fund. In recent days, frugal Denmark signalled a softer position on the issue, perhaps willing to compromise on the issue of giving grants to the hardest-hit countries in Southern Europe.

Focus in Europe is still on Brexit ahead of the looming deadline on 1 July. The UK will have to ask for an extension of the transition period, which expires end-2020 if the deadline for reaching a deal is too tight.

economic calendar 10-06-2020

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