06 m5 Dax Chart

Dax Technical Analysis 05/02/2016

[wp_ad_camp_1]

Good morning traders!

Some major analysts are arguing that the EURUSD can still move higher, explaining that the Euro is still substantially undervalued and the rate differential is having less impact right now. They argue that external balances are at their widest levels since 2004-2006, and the Eurozone’s Business cycle looks stronger than the US cycle. Speculators are stretched short and lower oil has become a Euro positive as well. So quite a strong argument.

If you believe that there is negative correlation between the Euro and the Dax, then this backs the case for further falls and potentially a break below major support.

Yesterday the daily candle closed at the lowest price since December 2014. We have seen prices reach lower levels recently, but the candles have always failed to close at those levels. The daily chart is forming a double bottom pattern which at support could indicate a bullish signal, but you could also argue that yesterday’s candle is heavily bearish as the door is now open to further lows. We are below the 200 daily EMA, broken lower from the long standing pitchfork and sat on major support.

On the four-hour chart we are still in the bearish channel but despite a mini Bollinger bounce, the most recent two candles have printed dojis suggesting indecision, this chart still looks heavy in my opinion.

As I write this article a candle has just closed on the 30 minute chart creating a wick around the weekly S2. We don’t often trade to much further than the S2, so have we already seen the move this week?

If we hold below the daily pivot I will be watching for a test of the daily low (I have just noticed the pivot has been pierced – so I am watching for a reaction as negative divergence is forming). A break below today’s low can see us test yesterday’s low. A break above the daily pivot and then subsequent break above yesterday’s high can see us open up a move to the R1 for the day 9589.

 

Dax Support & Resistance

KEY LEVELS
Daily R29786
Daily R19589
Daily Pivot9427
Daily S19230
Daily S29068
200 Day SMA10478

Dax Charts

02 Daily Dax Chart
02 Daily Dax Chart
03 H4 Dax Chart
03 H4 Dax Chart
05 m30 Dax Chart
05 m30 Dax Chart
06 m5 Dax Chart
06 m5 Dax Chart