Dax Technical Analysis 12/04/2017

Good morning traders!

On the newswires, German Police have stated that security is at high levels due to the blasts that occurred in Dortmund yesterday and have stated that this was a terror attack. BoJ Governor Kuroda stated BoJ easing is not targeting an FX level and that JPY weakness could help inflation reach target quicker. US President Trump stated that the US is sending an ‘armada’ to North Korea, while he added that the US is not going into Syria and that the strike should have occurred long ago. [INSERT POLITICAL RANT] My personal concern with the US attacking North Korea is that their retaliation will likely be the bombing of South Korea and/or Japan. Two nations that don’t deserve that, so the US are indirectly causing a potentially huge problem themselves. Trump is showing similar characteristics to Bush, with the whole “do what I say, or I’ll bomb you” attitude. Maybe it’s because he’s very clever and has a good team around him, or maybe it’s because history has shown that this tactic works, for example, look how effective it was in handling the various conflicts in the middle east [massive sarcasm, because neither of those is true – END OF RANT].

Let’s get to the Dax.

I have been very quiet on the trading front for the last few days, I just haven’t found anything interesting, except for in my article yesterday, I mentioned that 12100 could be interesting. I was considering placing an order there, perhaps a 50 point stop loss, looking for 2.5:1 reward, but that idea would have been wiped out very quickly. We traded below the S2 yesterday (pivot point indicator), after breaking below 12100 and reached a low of 12043 before reversing and rallying to close at 12183 creating a rejection candle on the daily chart.

When I look at the chart I see mixed signals at the moment, which is partly the reason why I have not been as active in my trading. But that gets me thinking because there are times when you can look at a market and try to analyse it to make a conclusion, but you can see what you want to see. What I mean is, you could easily find an explanation for the bearish case, you could find a way to explain the bullish case and because of that, you are stuck in a loop of indecision. Neutral, I suppose. So at moments like this, I trade other markets.

Dax Support & Resistance

14 Day ATR118.69
Daily R212325
Daily R112251
Daily Pivot12147
Daily S112074
Daily S211969
200 Day EMA11239

I am bullish USDJPY and bearish Gold currently, so this supports the bullish sentiment for the Dax.

I am seeing bullish divergence on the hourly chart, so in the short term there could be a buying opportunity, let’s see if 12135 holds, below that let’s see if the 12100 can hold.

Dax Charts

03 H1 Dax Chart
03 H1 Dax Chart
05 Dax m5 Chart
05 Dax m5 Chart