Current Outlook: Bullish, but threatening a major pullback
Resistance: 10009 10016 10033 10066 10086
Support: 9955 9926 9868 9830
Dax Afternoon Market Summary
Is this the start of a reversal?
Mario Draghi has already quelled the initial expectation of further QE this year suggesting that early Q1 will see some decisions being made. There are some interesting developments on the docket regarding China, one of the main trade partners for Germany. Large volume spikes across the markets.
EURUSD and USDJPY have experienced large moves over the last few days and the movements are closely linked to the Dax. We have been calling for a larger correction for a while, various factors are now beginning to align to suggest a further move down.
Price is currently stalling around 9795 and a wedge pattern is forming in the lower time frames with 9795 as the base. I wouldn’t be surprised if we close slightly closer to the current wvap around 9870[wp_ad_camp_1]
Dax Technical Analysis
Dax Morning Market Outlook
The consensus has been that the 9950 zone was a good opportunity to go long and buy a dip as the market has been Bullish and a correction to this area would agree with the short term fib zone, daily S1 and other technicals. The only concern I had with the dip buying was the potential for EURUSD profit taking which had the ability to send the Dax South. It seems today that the profit taking is dominating and the pair has been lifted by surging risk aversion. Some funds have even announced that they are unwinding EURUSD positions to cover losses elsewhere.[wp_ad_camp_3] USDJPY and Dax has shared some correlation lately and the USDJPY pair is currently in a similar position with dip buying dominating the trading strategies, but the pair is currently under pressure due to option expiries acting as a magnet and pulling the pair down aggressively today.
So my short-term bias for today is actually bearish, but unfortunately, I missed the opportunity to change my trades early on so I have had to react. 9868 is the daily S2 for today so this is going to be my target.