Good morning traders!
After a couple of days of losses we are still bearish, despite getting off to a quick start this morning. We are bearish so long as we stay below the underside of the trend support from the daily chart. We attempted to break this underside support on Monday and were rejected. Further downside risk is presently dominating stocks and a renewed fall in producer prices in China for September increased investors worries about the economy.
Bears will be looking to short from current levels of 9995 with a stop loss above recent high from wither yesterday or Tuesday and target a slide towards 9750 which represents a 50% retracement from the recent swing which you can see on the 30 minute chart below.
We have already bounced lower from the daily R1 which seems to be a key area for short-term intra-day trading, so that opportunity has passed.
I am watching the reaction to some of the soft US data that is coming out at the moment, especially to see how USDJPY performs. I want to know whether we are heading into a risk off situation which will give me a clue to future direction. Right now it looks to be making a break to the downside and threatening a break from its recent consolidation. It’s possibly that we don’t make the break on the first attempt and instead bounce.
I don’t love the idea of being long, so I will be patient and wait for my spot. For now I am watching forex.
Dax Support & Analysis
|200 Day SMA||10643|