Good morning traders!
Another fed rate hike discussion began on Friday after a disappointing NFP print. Many analysts have been supporting the view that September would be the month for lift-off, then December, but now it seems they are beginning to doubt it happening until next year. Would this be enough to provide a market rally, be it temporary?
I think the potential crisis in the emerging markets and subsequent knock on effects will certainly provide a continued bearish catalyst in the medium term, but yet on the other hand we have the Euro area back in deflation territory so the pressure is on the ECB to do more. We have been in a period of reduced QE because of the front-loading before summer, so levels will start to ramp back up again anyway, oil has also been a contributing factor in the lack of inflation growth. So you could argue that there is a bit of stalemate with the fundamentals especially as the technicals on the Dax are moving sideways.
The weekly chart shows the formation of a pin candle, which when coupled with a technical bounce from long-standing support, makes me believe there is opportunity for a bounce from current levels. The only thing stopping me trading it right now is that we have pierced the 9400 zone three times recently, with last week posting a new low, so I don’t want this to turn into a bull trap. A speculator might like the risk:reward setup here.
The daily chart shows a different story, we are approaching the underside of the pitch fork support and may find resistance here offering an opportunity to short. If you look at the fibonacci retracement levels from the september high/low (I haven’t drawn them on these charts), you could target 9912 if we break through the support from the underside.
The 4-hour chart shows we are back inside the regression channel but moving sideways, nothing interesting. The H1 chart shows some choppy alligator lines, no signals available here. The 30 minute chart shows the range we are trapped in very clearly. The pivot levels on the 5 minute chart are really stretched and mainly because of the volatility from Friday’s trading session. Congratulations to anyone who traded well on Friday on the Dax. I traded gold and did well, but did nothing on the Dax.
There is no much happening on the economic calendar this week, except if you have GBP trades on (like me).
Dax Support & Resistance
|200 Day SMA||10693|
Dax RSI Indicator Chart
If you had set your RSI indicator or the DaxTrade RSI EA software to RSI14 with 70 30 levels on a 5 minute chart on Friday, with 75 point stop loss and 200 point profit target, you would have won your first three trades of the day and two would currently be open. A good day! See RSI chart below.
To find out more about the DAX RSI indicator or the DaxTradeRSI EA software, please click the links above under trading systems.
I will be honest and say I have not been very proactive in managing these trades, because I could have gained a decent profit on Friday but chose to keep them going. I am happy to sit on for a lot longer now.