Dax Technical Analysis 18/11/2016

Good morning traders!

Yesterday I put a post out on Twitter asking people to vote on what was going to happen first: 1. Price reaches 10500 (as many would have expected based on a pullback) or 2. Price breaks above 10830. Well, so far neither has happened, but the we have broken comfortably above 10700 and even tested 10750 this morning, so the next level to watch is the recent resistance of 10800, I am also looking to see if we get a hourly candle close above 10775 as we have been rejected from here a few times over the past week or so.

There have been some interesting hawkish comments from Janet Yellen, bringing up the fact that the economy is near full employment and markets are seeing inflationary consequences from fiscal expansion. Based on what she is saying (the economy is doing well and there are not many more things we can wait for, so we’re probably going to increase interest rates), this has pushed the US Dollar index to it’s highest levels in over 10 years (relative to other currencies). The weaker Euro is often bullish for the Dax, but increased interest rates can often put stock markets under pressure as investor look to seek lower risk alternatives.

We are again at the top of the range on the daily chart and eyes turn once more to 10800 to see if we can get a break and close above this level. I am still surprised that we haven’t yet seen a correction of the price since the election result, but so often the Dax just does its own thing. Range traders will be looking at current price as an opportunity to short. Is it an opportunity to buy now? Only if you like buying markets at the top.

On the H4 chart, I am watching for a break above 10750, the first test this morning was rejected. You can see the zone I was targeting for a buy down at 10500, I haven’t thrown in the towel on this idea yet, but it’s looking less likely with price up here.

On the hourly chart, we had a wedge break, to the downside, first thing on the 15th, but since then price has continued to trade sideways and remain range bound. Traders are waiting to trade a break lower or a break higher, but many are watching right now.

On the 5 minute chart there is bearish divergence visible after the highs first thing this morning and, true to form, price just shed the best part of 50 points, I missed that opportunity, but never mind. Short-term traders are possibly looking for an opportunity to buy at 10665.

Dax Support & Resistance

KEY LEVELS
Daily R210818
Daily R110775
Daily Pivot10690
Daily S110647
Daily S210562
200 Day EMA10341

Dax Charts

01-dax-daily-chart
01-dax-daily-chart
02-dax-h4-chart
02-dax-h4-chart
03-h1-dax-chart
03-h1-dax-chart
04-dax-m30-chart
04-dax-m30-chart
05-dax-m5-chart
05-dax-m5-chart
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