Trading the Dax generally always has its ups and down as it continues to maintain its reputation as a volatile market and it has been challenging to trade for much of October so far, despite one or two clear opportunities. We are still range bound overall right now, with no clear direction, with bulls propping up 10465 and bears defending 10700.
Using a range trading strategy, a buy zone of 10465-10500 will allow bulls to accumulate a position and a sell zone of 10665-10700 will allow bears to do the same. We are currently approaching the buy zone, so I will look for signals to go long, whilst at the same time watching the US equity markets for confluence.
We started the session today with a gap lower and parred those loses after an interesting bit of price action (on the 5m chart – multiple consecutive engulfing candles) before turning around and continuing the bearish momentum creating a new daily low. 10450-10482 is a pullback zone that many traders will have marked on their charts, this also ties in with the buy zone mentioned earlier, so perhaps a potential long opportunity will exist down there. We are currently trading around 10505.
A decent break below 10465 opens up 10350 again. If 10465 holds then we can look to target 10600 and 10700 once more.
For me, price is bearish below 10700 and in the very short term price bearish below 10620.
Dax Support & Resistance
|200 Day EMA||10264|