Good morning traders!
We made another 130+ points yesterday making a current running total of over 500 points so far this week and despite being a little bit overbought in the short term, the groundwork is being laid for a continued move higher. I would expect that a few points are given back while the market catches its breath and I am watching for a move back towards the breakout area of 11450.
Greece still dominates headlines but the latest developments (i.e positivity from talks) are in line with many analysts predictions. A deal seems highly likely at the moment, although further concessions will be required from both sides. There are still gaps on fiscal measures to meet the surplus targets and pension sector reforms. The meetings this week may be the last chance for a high-level agreements keeping in mind that approval of an agreements takes time to complete.
So banks have been kept alive by ECB’s ELA facility, the population of Greece are not in favour of a Grexit, but Germans are tilting towards letting them go. There are further EU summit talks tomorrow and Friday. Most of Greece’s debt is to the institutions so Greece’s finances are likely to remain on a knife-ege throughout the summer, regardless of whether a deal is made or not. I found an interesting summary of Greece’s future below:
Dax Support & Resistance
|200 Day EMA||10856|
The weekly chart shows a strong reaction to the median line and the two previous weeks are now definitely looking like reversal setups
The 200 EMA was a strong platform for a bounce and it looks unlikely that it will be broken at the moment. A breakout above previous June highs is interesting to watch but I expect a pullback before going higher.
The one key resistance level overhead at the moment is the trendline from October, we are now approaching it from the underside and I would expect a reaction to this. So I am reluctant to go long from current levels and would prefer to get in a little lower if I can.
The breakout level is a decent opportunity to get in for me.