Keep an eye out on the developing head and shoulders pattern from the daily chart. Especially if we break below the low from yesterday and continue to forge lower lows. This pattern would suggest a bearish reversal. Moving down to the hourly chart, we remain trapped in the range (mentioned above) and await a break for a further steer.
We had very thin volume in the market yesterday, thanks to the holiday in the UK and US. So the Dax futures market continues to move sideways for now. The buyers seem to be defensive at the moment and there are some technical indicators beginning to offer signs of reversal. MACD on the weekly chart is close to triggering a signal (sell).
Let’s come back to this hourly chart and watch the trend line break. If this setup plays out it will great for that trade we discussed. I have drawn out a couple of zones. The support zone is a good target for shorts. The resistance zone, has been a support level in the past, so this is a potential spot for shorts.
So with price action being so slow, I thought I would look at a different chart. This is an example of one I sent to the broadcast channel yesterday. We have a triangle pattern emerging. We normally would see a reaction by now, but at the moment, nothing. Keep a eye on that.
Also keep an eye on a break lower.