Good morning traders!
No surprises from FOMC in regards to the interest rate decision, with the committee deciding to keep rates unchanged to help the economy overcome weaker global demand. However they did hint at a lift-off at the next meeting, in December, which created a wave of USD buying and volatility across most markets, and such hawkish tones suggest that they are more comfortable with future prospects.
The Dax smashed through some resistance levels yesterday, for example the 200 day EMA, last week’s high and the daily R2. We are approaching the 11,000 and the upper trend bound from the longer term daily bearish trend channel, both of which may prove to be stubborn to break. I missed the move, I had no trades on, but congratulations to anyone who caught it.
I am finding the 5 minute chart the most interesting at the moment, because I am liking the clean fractal waves. The fractals are based on hourly data, but a Bill Williams fractal trading strategy would have done very well in these circumstances.
For today, I am watching for a couple of scenarios: we may pullback towards the daily pivot and then rally up to the R1. Or we may head straight for the daily R1 and bounce lower on the first test of 11,000. The other scenarios are a full rejection of 11,000 or blasting straight through. Based on the fact that we have created a new fractal, I like to sit and wait for a pullback. I may move my RSI settings to 90 40 to get the buy signal.
In forex I am short EURUSD, EURGBP and long the USDJPY.
DaxTradeRSI is being updated as we speak and should hopefully be available soon with a trailing stop feature.
Dax Support & Resistance
|200 Day SMA||10635|