Dax Technical Analysis 21/07/2015

Good morning traders!

The relaxation in the Greek debt crisis has brought a positive start to the week. The Dax gained just under 70 points closing at its highest level since late May, with another positive/bullish signal.

With the Greek cloud lifting (even if it is only temporary) the path is clearing for economic data to have the more significant influence once again and we are currently in a largely positive quarter for earnings right now. Some analysts are pointing to the hope of continued good business in the US and of the crude oil and the euro prices falling again.

I personally think Gold was the major talking point as the “perfect storm” gave us a incredible display of price, taking out key support and plummeting through the $1100 barrier like a lead balloon. Many articles are discussing the reasons for the sell-off but most agree that there is now a reduced need for defensive havens with the imminent (Sept) US dollar lift-off and there is also a reduced need for inflation hedges. Great for foreign exchange and commodities, but what about Dax? Well I think the US are massive trading partners with Germany, so when they do well, Dax tends to do well too.

Regarding my personal trades, I still haven’t got my position on yet, I would like to see a settling before going long. Glancing at the RSI on the 4-hour chart, we are still overbought right now, just holding above the 8 EMA but beginning to slow. If we get a pullback, I want to watch a move towards the previous 11632 resistance and ideally I want to see a move to the .382 fib zone of the recent swing (8/7 – now) which would be closer to 11360.

Regarding my automatic trader (details on the right), after a period of turbulence and a few mistakes with too many markets  trading loose settings which I failed to manage properly, I have found the main problems, ironed them out and am now finishing up the final testing.

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Dax Support & Resistance

Daily R211867
Daily R111810
Daily Pivot11747
Daily S111690
Daily S211627
200 Day SMA10924

Dax Charts

The highest close since end of May and perhaps we can now start to build again from here, although we may be a little overcooked and I expect a base to be built a little lower, we have recovered strongly.

2Dax Daily Chart
2Dax Daily Chart

We still are within touching distance of the major fib from the April-July swing and i would still expect to see some kind of bounce before we build higher. I have not opened a position yet because of this, so I hope I don’t miss the chance to get in.

3Dax Intra-day Chart (4 hour)
3Dax Intra-day Chart (4 hour)

Three setups are possible on the 30-minute chart.

4Dax Intra-day Chart (30 minute)
4Dax Intra-day Chart (30 minute)

Nice breakout from last week here:

5Dax Intra-day Chart (5 minute)
5Dax Intra-day Chart (5 minute)

The FXI indicator is still showing a high probability of a direction change on the daily chart (top left) and the 4-hour RSI (bottom right) shows us overbought as well.

6Dax FXI & RSI Charts
6Dax FXI & RSI Charts