Dax Technical Analysis 22/06/2016


Good morning traders!

So the countdown to utter financial meltdown and complete global Armageddon begins, ok, maybe I am laying that on a bit thick. But we are nearly at the final decision stage (in the UK) on whether or not to remain in the EU. I have a number of political concerns about the referendum, but I also have some concerns about trading conditions as well. If you remember back to January 2015, we had the Swiss Franc explosion leading a number of failed brokers, wiping out traders accounts and causing general mayhem. Brexit clearly has the potential to do the same. We will likely witness brokers platforms crashing, enormous slippage, stop losses failing to execute at the desired levels, lots of unfortunate losers and lots of lucky winners. But I think luck is going to play a large part in it, so for this reason, I am not trading it. I don’t want to flip a coin and guess.

I don’t want to debate the arguments in detail, as I may have said in previous articles, for the simple fact that everyone else in the financial world is doing it. But I will summarise a few points for both sides.

10 reasons to leave the EU

1. Centralised power is the wrong way to go
2. Fringe nations perform better
3. Regulation should be local
4. The economic disaster that is southern Europe
5. Immigration policy is becoming ever more important
6. Trade deals are a red herring
7. Further integration with the EU = economic decline
8. Democratic accountability matters
9. Land ownership and the Common Agricultural Policy
10. The Common Fishing Policy

10 reasons to stay in the EU

1. Worldwide, the EU has the biggest economy
2. The NHS will not benefit from leaving because our economy will shrink
3. Access to the single market.
4. The EU is aiming to become more democratic.
5. The EU is not part of the new world order.
6. Leaving the EU does not guarantee increased border control.
7. Companies would leave leading to unemployment.
8. Freedom of movement and better human rights
9. Germany wants the UK to stay! Once we’re out, that’s it, no coming back
10. The UK is a small nation with increasing worldwide competition. We’re not stronger alone.


Dax Technical Analysis

Unless we get some more news, we are likely to move sideways for the rest of the week and be held in a range. So there is not a great deal to go into as we are approaching one of the largest high impact, high volatility news releases, in my trading history.

We are in a short-term bullish trend, making higher highs and higher lows, made pretty clear on the 5-minute chart. We are at the bottom of the channel, so this provides a decent risk:reward opportunity to go long, with a stop under the channel (or the daily pivot).

We are above the daily S2 on the weekly pivot point indicator and just about reached the daily 200 EMA yesterday evening. This will alert bears to the opportunity for a large short back down to nearer 9500 and lower.

These levels won’t really hold price on Thursday evening and Friday, so for now, let’s just prepare for the volatility.

Dax Support & Resistance

Daily R210232
Daily R110147
Daily Pivot10036
Daily S19952
Daily S29841
200 Day EMA10116

Dax Charts

02 Dax H4 Chart
02 Dax H4 Chart
01 Dax Daily Chart
01 Dax Daily Chart
05 Dax m5 Chart
05 Dax m5 Chart
04 Dax m30 Chart
04 Dax m30 Chart
03 H1 Dax Chart
03 H1 Dax Chart