Dax Daily Chart

Dax Technical Analysis 22/06/2015

[success]Check out my free indicators post from Friday[/success]

Good morning traders!

The deadline is drawing nearer and nearer now and today we see an emergency Euro leader summit which may provide a hint as to the result of this end game; either a deal is likely to be struck or Greece will be defaulting and leaving the Euro. I am reading reports from many analysts and most of them remain optimistic of a deal, but just not until last minute, suggesting this this week could see some disappointing developments in discussions before the month end deadline.

In the grand scheme of things, ignoring the tabloids, the difference between the two sides is relatively small, both are simply trying to protect their positions by minimising concessions. The stakes are huge but both parties would stand to gain little by failing to reach agreement. The timing of the current issue is not great with the summer periods hitting liquidity most of the time anyway, so even if a deal is struck there are still short and long term problems on the horizon. Much can be discussed over the coming months.

As far as trading goes this week, I am only going to be trading small positions from my automated trading software (which I am still testing and you can follow the results here). I am still sitting on the sidelines and waiting for an outcome, the economic calendar looks a little light this week so there isn’t a lot to look out for.

Dax Technicals

I am watching for a development in the current descending wedge formation on the 30 minute chart and a reaction to last weeks double bottom around 10850. I am watching further reactions to the 200 EMA, also the volume on the daily chart to detect potential stopping volume, the weekly chart is still interesting and I am watching the fork on the 4 hour chart, see the charts below for more.

Dax Support & Resistance

Daily R211346
Daily R111189
Daily Pivot11093
Daily S110936
Daily S210840
200 Day EMA10825

Dax Charts

The weekly candle from last week was starting to look strongly like a pin but the stem/wick reduced after Friday and it still resides around the median line of the fork with volume picking up.

Dax Weekly Chart
Dax Weekly Chart

The descending wedge formation could be interesting to watch if we get a further fall in price this week to compress the pattern deeper into the wedge, somewhere towards the weekly S1 or towards 10850. I would be waiting for a breakout before taking a position, but before that I expect plenty more volatility and choppy-ness.

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

The fork is still an interesting pattern to watch on the 4 hour chart, we seemed to be riding the median line and respecting the upper levels, but the 10850 is currently holding out as support, approximately the .382 fib of the Oct-Apr swing.

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

I am not sure how accurate this volume spike is on the daily chart below, considering my Friday report screenshot of the daily chart didn’t pick it up… but assuming the FXCM Saturday update has recalculated its stats, it seems Thursday saw a pretty big jump in volume, suggesting a lot of trading activity when rejecting a move below 10850, see below. I’ll take it with a pinch of salt for now.

Dax Daily Chart
Dax Daily Chart