Dax Technical Analysis 28/01/2016

Good morning traders!

FOMC didn’t really trigger the reaction I was hoping for in either the dollar or equities and we are still trading sideways on the EURUSD which is trading in a big range at the moment, and I am looking for a trend to begin here to help me gauge which way the Dax is likely to lean.

The overall trend on the Dax is bearish, using the daily 200 EMA as my trend indicator, we have recently pierced major lows and are currently experiencing a reaction to those lows. Some refer to recent price action as a dead cat bounce, some call it a relief rally, either way it’s currently causing problems trading a trend following strategy as the intra-day swings have been quite significant recently.

Yesterday there was on interesting trade opportunity on the 5 minute chart. If you load an RSI indicator and look between 9:30 and 11:30 you will see some positive divergence (see 5m chart below) and this is a good bullish signal. Price action then rallied 200 points in two halves. The first half of the rally retraced back to the daily pivot and then extended almost perfectly 100% to complete the move. A great trade opportunity, but then hindsight is always accurate.

What To Watch Out For

Look at the m30 chart and see how price is forming a triangle underneath the neckline of the inverse head and shoulders pattern. This provides a realy good breakout trading opportunity. I don’t yet know what sort of targets to aim for, but I sense a trade is there soon.

If I had to choose which way I thought it was going to lean, I would choose bearish.

Still watch out for a break out from EURUSD

Dax Support & Resistance

Daily R210013
Daily R19888
Daily Pivot9802
Daily S19677
Daily S29591
200 Day SMA10529

Dax Charts

02 Daily Dax Chart
02 Daily Dax Chart
03 H4 Dax Chart
03 H4 Dax Chart
05 m30 Dax Chart
05 m30 Dax Chart
06 m5 Dax Chart
06 m5 Dax Chart

2 thoughts on “Dax Technical Analysis 28/01/2016”

  1. loucas

    Hello Chris,

    Me too im looking eur/usd and waiting for breakout for long to follow the bearish dax !!!

  2. mr.dmizer

    Well, of course we will be in a downtrend while major swings are taking us lower and lower. Currently we are just in a middle of a minor pullback and I expect this consolidation to end very soon. No point of going long, against the trend, against the rules.

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