Good morning traders!
Have you seen the FTSE? It has pretty much recovered all of its recent losses which is pretty incredible, yet the Dax falls behind by quite some margin. Is it likely to recover all of its losses, like the FTSE? And get back to the 10,000+ level over the next couple of days? I may be wrong, but I don’t think so.
Yesterday we stayed above the daily pivot (pivot point indicator) for the whole day, oscillating around the R1 regularly before closing in between the R1 and R2, around 30 points or so under the high for the day in what turned out to be another bullish daily candle. The retracement continues and the short-term bullish channel remains intact.
There has been a bullish trend line developing, visible on the 5-minute chart, which was respected until around 15:30 BST, before breaking lower and testing the underside, twice, in what could be seen as a typical “kiss goodbye” technical move. At the same time as this bullish trend line, there was also a mini Head and Shoulders pattern emerging, also visible on the 5-minute chart, with a neckline around 9562. If this neckline is broken, then this adds confluence to the ‘trend-line break’ mentioned earlier and could offer a shorting opportunity from 9562 down to 9485.
I feel that bullish momentum is beginning to slow and we could be gearing up for a roll over soon, I am just waiting for the sell signal. I am bearish, based solely on the fundamental outlook of prolonged uncertainty. Medium term I think we can break below 9000.
If the bullish momentum continues and we break yesterday’s high, the door opens to a move towards 9750 and I still like a short from 9750.
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Dax Support & Resistance
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