Dax Technical Analysis 11/05/2017

Good morning traders!

I have been following the North Korean vs the US recently and the most recent update is the US Pentagon saying that North Korea must still solve important shortfalls in developing a nuclear-armed ICBM before it can deploy a weapon capable of striking the US. It seems a little provocative if I was North Korea I would now be putting all my focus on developing exactly that. Looking ahead today, we have UK Industrial and Manufacturing Production, BoE policy announcement, ECB’s Constancio, Praet and Fed’s Dudley. Keep an eye out for those.

Taking a look at the Dax for yesterday, we ended the day around 16 basis points higher overall (approximately 20 points) but were unable to break above the 12785 I mentioned in the article yesterday and unable to break below the Monday low, so we remain trapped in a range. Intra-day traders could have benefited from a simple Stochastic oscillator strategy as there were three or four examples of price turning around after reaching the Overbought/Oversold levels.

Looking forward, the levels I mentioned yesterday are still valid, we need to break out of the range for the next move. My algo remains bullish, so I am looking for a break higher. On the hourly chart, there is a wedge pattern forming. Keep an eye on that for clues as to which direction the break will be.

Away from the Dax, I am interested in GBPUSD and Oil at the moment, there is also potentially an opportunity on EURUSD.

Dax Trading Opportunity

On the 5 minute chart, I have marked out the range. You could argue that because we are in a short-term range, we have a trading opportunity to sell at the top of the range and buy at the bottom of the range. The rectangular boxes are 20 points deep to use as a guide for stop losses, but the reward to risk could be very good.

Alternatively, a break above these levels could be an interesting opportunity.

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Support & Resistance

14 Day ATR113.37
Daily R212821
Daily R112794
Daily Pivot12751
Daily S112723
Daily S212681
200 Day EMA11436

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