Technical
DAX – Large head and shoulders top pattern suggests further downside.
Weekly: The index has formed a large head and shoulders top pattern. The rally in recent weeks has led to a retest of the neckline of the top pattern. This also coincides with a 50% Fibonacci level at 11743. A rejection at this level suggests that the corrective move higher is about to end. The measured move of the head and shoulders top comes in at 9803.
Daily: Price action has formed a bullish ending wedge formation. Selling continued from the 50% pullback level of 11745. Price action has posted a bearish Engulfing Candle and is negative for short-term sentiment. Bespoke resistance is located at 11704. Preferred trade is to sell into rallies.
Intraday: Broken out of the channel formation to the downside. A lower correction is expected. A break of 11565 is needed to confirm follow through negative momentum. Negative overnight flows lead to an expectation of a weaker open this morning. Further downside is expected.
Action: We look to sell on rallies to 11660
Stop: Stops to be placed at 11860
Targets: 10285 & 9805
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Before deciding to invest in spot foreign exchange or futures you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with spot foreign exchange and futures trading, and seek advice from an independent financial advisor (IFA) if you have any doubts. All information posted on this website is of our opinion and the opinion of our visitors, and may not reflect the truth. Please use your own good judgment and seek advice from a qualified consultant or IFA, before believing and accepting any information posted on this website.
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Losses can exceed deposits
