Dax Intra-day Chart (4 hour)

Dax Technical Analysis 08/06/2015

Good morning traders!

[error]Key support of 11150 has been broken, watch for reaction[/error]

I have been commenting on the 11150 level for a little while now expecting us to use the area as a springboard higher. I believe there are many stops around here, perhaps a little further down, to provided some volatility. But there is not a huge amount of historical support. I am personally looking to see if we close today above or below 11k. This a big psychological level and guards the route down to 11800.

The US job report for May was good, 280k! Net revisions to March and April were also positive and the three-monthly average is now above 200k. Average hourly earnings increased which lifted the yearly rate to the highest level since August 2013. This now strengthens the case for a first Fed rate hike in September, even perhaps influencing the more dovish FOMC members. EURUSD is set to go lower when the Fed hike becomes evident.

So the Dax is kind of in limbo at the moment from the looming Fed hike, Bond sell-off and Greece dragging on, with the latter featuring this week (11th). ECB president Mario Draghi said it best when he mentioned “we should get used to higher volatility”, particularly true when looking at bond yields. The Troica are hoping that a detailed agreement can be reached before the full Eurogroup meeting on the 12th. But it will likely drag on until mid June, causing further uncertainty and waves in the market. I think at the moment, I will be a passenger and watch. I am ready to pull the trigger and go long, but I think we can get in at lower prices.

I have no open trades on the Dax right now, despite receiving buying signals, I may place a buy order at 11300 to trade a break higher.

Dax Charts

On the five minute chart below the downtrend is highlighted by the hourly fractals, so watch for a reaction around 11200 which is around the daily pivot or the daily R1 if we do take that out. That could provide a bear with a selling opportunity. A break below 11100 is another option.

Dax Intra-day Chart (5 minute)
Dax Intra-day Chart (5 minute)

Another option to the downside could be this (on the 30 minute chart):

Dax Intra-day Chart (30 minute)
Dax Intra-day Chart (30 minute)

I have used bearish settings on the RSI indicator to provide this screenshot. It will be interesting to see how long we stay bearish for and whether any signals are generated.

RSI Signals and Alerts
RSI Signals and Alerts

We approach the 150-day composite vwap which is currently around 10850 and it may become magnetic if we close below 11k.

Dax Volume Profile Chart (5 minute)
Dax Volume Profile Chart (5 minute)

On the 4-hour chart we are approaching the top side of the downward channel parallel off the all time high, but price is trading below the key support, so the parallel may not provide much support.

Dax Intra-day Chart (4 hour)
Dax Intra-day Chart (4 hour)