Dax Technical Analysis 29/06/2015

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Good morning traders!

So the Greece crusade continues with some stating that it is close to collapse, yet there are so many unanswered questions regarding the potential outcomes and the best way to handle or manage the Grexit. My question would be what currency would they go to? If they leave the Euro and return back to the Drachma for example, won’t they have outstanding payments to make in that currency? There’s a good article here: http://www.ft.com/cms/s/0/1987071c-14c8-11e5-9509-00144feabdc0.html#axzz3eP6sSS7F.

The referendum, the capital controls, the bank holiday, the IMF payment deadline are all talking points at the moment and are gaining popularity in the social media feeds. There are various spreadbetting/CFD sites and analysts discussing the huge gap that we will see in the morning, to the downside, and I am just glad that I don’t have any positions open right now.

I had always steered towards the “a deal will be found” camp because even if a deal is not made on the 30th June, it doesn’t immediately mean default. The IMF will allow a certain amount of relief, perhaps until after the referendum. But the reality is dawning that actually things are getting pretty ugly and escalating with growing contagion fears.

Another interesting point to consider is the divergence in business cycles between US and Germany at the moment, making it tricky to predict or at least speculate on the direction of the Dax. So I have decided to not trade until after the 30th, I have switched off the automatic trader and I am just going to watch. There is too much volatility. Good luck to anyone who decides to do it, or shorts the market and makes a few quid. I still won’t be tempted to short.

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Support & Resistance

KEY LEVELS
Daily R211675
Daily R111597
Daily Pivot11483
Daily S111405
Daily S211291
200 Day EMA10864

Dax Charts

Simple daily chart with a 200 EMA and an ichimoku kumo cloud on the main area and RSI and volume bars at the bottom. We seem to be base building at the moment and wanting to move higher, but the Greece issue will almost certainly send us towards another test of 11k. A break below 11k will trigger many stops and I think we’ll see some swings.

Dax Daily Chart
Dax Daily Chart

Another bearish sign with the top of the bearish channel being touched again and with the majority of providers pointing towards a large gap lower when market open this morning, we see us respecting the lines and building from lower levels again.

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

So a break below 11k could open up the door to a full 50% fib retracement from the Oct/Apr swing. But just breaking through the 11k barrier will not guarantee anything, it make take a few attempts to get down to the mid 10k zone.

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

A drop to the 11k zone on open will mean trading between the S3 and S4 zone, which is not a common event. Could it provide a long entry opportunity where we speculate on the gap closing before moving lower again? Such as a bounce back to 11300.

Dax Intra-day Chart (5 minute)
Dax Intra-day Chart (5 minute)
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