Dax Technical Analysis 08/05/2017

Hello traders!

Over the last 6 months, analysts have been speculating as to which events may help to shape the markets in 2017, we’ve discussed Donald Trump and Brexit and the elections and a major theme in the columns was the possibility of an over reaction regarding the French elections. Le Pen would have posed an existential crisis for the Eurozone, but for most people, the odds of that were slim. Congratulations Macron! The youngest French leader since Napoleon. He is highly likely to find problems to begin with as his lack of seats causes obstacles, but he’s keen to work closely with Germany to strengthen the EU relationship and advocates a common fiscal policy with a protectionist stance. Perhaps meltdown was avoided here in France for now.

Regarding the Dax, last week I pointed out that we were showing some bearish divergence on the hourly chart and the technicals were beginning to point to the downside. I mentioned that I was not interested in shorting, but there’s a potential opportunity to speculate. but instead, the Dax rallied a further 150 points to reach yet another all-time high. I believe many traders have been caught up in this one, by going short, only to be left wanting. And this is the harsh reality of trading the financial markets, especially the German Dax, it does not always react the way you would expect, but also the reason why stop losses are so important. So that setup did not play out.

So that setup did not play out, let’s look for another.

Overall, the Dax is bullish above 12000, there is a support cluster between 12410-12500 which I would expect us to test as some point. We could even find levels such as 12150 and not be reversing. On the hourly chart, I am watching for 12600 for support and perhaps 12500. As we are in uncharted terrritory, it seems that the rounded number rule is working, so price is respecting increments of 100 points.

On the 5minute chart, we are testing the daily S1 (pivot point indicator). I am wondering if we go up to the daily pivot, then turn back lower towards the Bollinger band mid line or even the daily S2.

Dax Support & Resistance

14 Day ATR129.02
Daily R212987
Daily R112903
Daily Pivot12749
Daily S112665
Daily S212511
200 Day EMA11396

Dax Charts

01 Dax Daily Chart
01 Dax Daily Chart
03 H1 Dax Chart
03 H1 Dax Chart
05 Dax m5 Chart
05 Dax m5 Chart