Good morning traders!
Bulls have stepped in after last weeks release from Draghi combined with a relief rally in Oil. We are currently setting up a couple of trading opportunities, depending on your bias and today I have gone long.
Draghi has hinted at a further rate cut so the EUR can still slide which is supportive for the Dax.
On the daily chart I am using MACD and have spotted the MACD line crossing through the signal line, so many traders may consider this a reversal signal because we are right on support and people buy at support. But when I trade this indicator I am looking for some positive divergence to perhaps suggest that bearish momentum is slowing down and that maybe we can see a reversal. I can only see a really tenuous positive divergence if we look at the Aug ’15 low compared to current lows. We made lower prices but the MACD has not. However this is a tenuous link because the divergence occured between the Aug ’15 low and the Sept ’15 low. So I am probably trying to force a technical pattern to fit over a chart, where is doesn’t exist.
I am choosing to be aggressive with this signal and looking for buying signals. I
The H4 chart suggests a buy from a pullback around 9600 or on a break above 9844 or a break above the 10165 trend defining level. Alternatively a short on a break below the lows.
The 30 minute chart has broken out from the bearish trend channel which could also be considered as a bullish signal and the top side of that chart has already been tested and rallied. This bullish reaction caused a break through the Sept 19th lower high and we are now finding some support on the 34 hour EMA. A break above current highs can give us a test of 9950 and higher.
Dax Support & Resistance
|200 Day SMA||10552|