News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bearish
Oil - US Crude
Bearish
Wall Street
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Bullish
GBP/USD
Bearish
USD/JPY
Mixed
More View more
Real Time News
  • Traders tend to overcomplicate things when they’re starting out in the forex market. This fact is unfortunate but undeniably true. Simplify your trading strategy with these four indicators here: https://t.co/fYgcMxImlP https://t.co/kkekBVYvhV
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/VwIkOMpvYl
  • “The UK and EU have agreed to return to the negotiating table to try to agree a post-#Brexit trade deal. But on Friday, a joint statement said ‘significant divergences’ remained.” - BBC News #GBP
  • Multiple time frame analysis follows a top down approach when trading and allows traders to gauge the longer-term trend while spotting ideal entries on a smaller time frame chart. Learn how to incorporate multiple time frame analysis here: https://t.co/Sy3g6HGLrR https://t.co/aRfVCRZut3
  • Forex sentiment analysis can be a useful tool to help traders understand and act on price behavior. Learn how to get the most out of understanding trader sentiment here: https://t.co/rJznrXkcYz https://t.co/uUh18lR3yK
  • The rising wedge is a popular reversal pattern that is predictive in nature and can give traders a clue to the direction and distance of the next price move. Incorporate the rising wedge in your trading strategy and learn more here: https://t.co/zTTk2WOrj9 https://t.co/q5oBalZieU
  • Both the S&P 500 and $EURUSD will enter the coming week with momentum to their back. What can trip up the rallies? What could keep them going? My overview for the week ahead: https://www.dailyfx.com/forex/video/daily_news_report/2020/12/05/SP-500-and-EURUSD-Rallies-Face-Different-Conviction-Questions-.html?ref-author=Kicklighter&QPID=917719&CHID=9 https://t.co/YfEXEhkbhl
  • After the recent strength of EUR/USD, a period of consolidation is likely ahead of two critical meetings: of the European Central Bank and the European Council. Get your $EURUSD market update from @MartinSEssex here:https://t.co/Slu7tHo2a4 https://t.co/9am4szeia1
  • Triangle patterns have three main variations and appear frequently in the forex market. These patterns provide traders with greater insight into future price movement and the possible resumption of the current trend. Learn about triangles here: https://t.co/ZukLITx2KG https://t.co/gvkXqKDQyH
  • Continuation patterns can present favorable entry levels to trade in the direction of the prevailing trend. Use continuation patterns in your technical analysis here: https://t.co/TUVnO3bO1P https://t.co/vBLkMKjf4x
DAX: Dead Cat Bounce Leads to Support

DAX: Dead Cat Bounce Leads to Support

2016-06-16 09:09:00
Paul Robinson, Strategist
Share:

What’s inside:

  • Broader trend is lower based on H&S formation, global synergies helping out
  • Small bounce led to test of support so far today
  • On the watch for cues to short-term set-ups within bigger picture scope

We are currently working within the broader framework of a breakdown from a head-and-shoulders pattern, which projects much lower prices ahead. It’s not just the DAX which is breaking down from this bearish formation, but the CAC and FTSE, too. You can even throw in the Nikkei breaking down from a consolidation version of the pattern (The Nik traded just below its 4/7 low as well just earlier this morning). And all these major indices have something else in common: clear downtrends going back as far as 14 months; it was the DAX which actually peaked first amongst major global indices.

So with the market leaning lower through our ‘macro-tech’ lens, let’s dial in and look what’s going on in the short-term. On Tuesday, the last time we discussed the DAX it was made mention that the balance of power was in favor of the sellers, but risk of a bounce, even if short-lived, had become elevated. So it was, a small rebound ('dead cat bounce') developed into yesterday, but quickly faded out. This lead us to today where the DAX continued lower, but then found support from just beneath the April 7 swing low of 9441 (today low 9433).

Before the risk of a bounce was based solely on the premise that the market had fallen too far, too fast. Now the risk of a rebound is based on tangible support levels at hand. If a meaningful bounce doesn’t result today, and we see a strong close below the April low, then a drop into the 9200s or worse in the short-run becomes the risk.

For those looking to establish fresh shorts, ideally the DAX bounces into staunch resistance up above in the ~9730 to 9815 area before resuming lower. The bottom-side parallel just above may prove to be an inflection point, the DAX was incapable of holding yesterday's rally above it. Even if we don’t see our ideal scenario, if the market fails to respond to support in a material manner, we will look for other technical developments to help guide us. On this end, rejections on counter-trend rallies into resistance and consolidation patterns (triangles, channels, bear-flags, etc) are the preferred set-ups.

DAX (Ger30) Daily

DAX: Dead Cat Bounce Leads to Support

Find out what characteristics are common among successful traders in our free guide, “Traits of Successful Traders”.

---Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES