Dax Technical Analysis 10/02/2017

Good morning traders!

Is Deutsche Bank getting distracted from its day-to-day business?

I also read that the Dax could lose 20% if Donald Trump puts up trade barriers because as Germany is so export-reliant, they are particularly vulnerable to a trade war than other economies. So let’s watch out for any more clues on Trump’s import tax plans. Protectionism in the US has a lot of potential to cause waves, this is just one of them, 9000 would not be unlikely if this were to happen. The positive is that Trump may decide to see sense, may decide to actually engage with the brain he has, may decide to actually listen to his competent aides (if he has any) and choose not to damage international trade and perhaps rely on economic stimulus instead. If that were to be the case, we can look towards an all-time high. Until we have some clarity, we can continue to trade sideways.

The economic calendar today is fairly light, but watch out for the Michigan Consumer Sentiment Index to provide a little bit of volatility on the Dollar (and possibly SPX/Dax) and the NIESR GDP Estimate for UK which could provide some volatility for the GBP pairs.

Dax Technical Analysis

My algo is neutral right now, after spending most of the day bullish yesterday. Aggressive bulls will look to go long with a stop under the gap. Bears may look to target a gap close but concede that bulls will stop in again once it happens.

Yesterday I had a pretty good day on forex taking my total to +205 points for the week so far and there are still a couple of trades out there doing well. Congratulations to those who did the same. My algo bought the Dax at 11605 for a win during the day as well. A better trading day than I have had recently.

Daily Dax Chart

Yesterday, bulls enjoyed a decent day closing nearly 100 points higher. It strengthens the support zone around 11515 but asks the question of whether we can break above the 11710 level again. The doji on Wednesday is still the largest volume day of the year, so read into that what you wish. I remain bullish but am keeping an eye on the US.

01 Dax Daily Chart
01 Dax Daily Chart

Hourly Dax Chart

When we broke the channels at the beginning of the week, I was expecting to see more of a reaction but instead, we have pared all of the majority losses and tested the resistance zone once more. The gap open this morning has signalled some bullish intent which is encouraging for me, if the gap closes, this may provide an opportunity to #BTFDUFI (buy the dip). Price broke out higher from the ‘familiar range’ again and we could use the previous resistance as support once more as it continues to climb.

03 H1 Dax Chart
03 H1 Dax Chart

5m Dax Chart

Yesterday showed a textbook bull trend; higher highs and higher lows which continued this morning, so intra-day we are bullish above 11630. We have already taken out the daily R1 (pivot point indicator) and are currently resting on it as I write this article. The daily pivot is below the gap that opened this morning, so even if we break below 11630, we could still find some support there.

 

05 Dax m5 Chart
05 Dax m5 Chart

Dax Support & Resistance

KEY LEVELS
Daily R211732
Daily R111688
Daily Pivot11617
Daily S111573
Daily S211501
200 Day EMA10807
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