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.

Free Trading Guides
EUR/USD
Mixed
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
GBP/USD
Bearish
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
USD/JPY
Bullish
Gold
Bullish
Oil - US Crude
Bullish
Bitcoin
Mixed
More View more
Real Time News
  • Missed today's Cross-Market Weekly Outlook webinar? See the recording here: https://t.co/d1rb3hCZTH We discussed: - US-China #trade deal - #Brexit outlook after the UK general election - US #Dollar outlook going into 2020
  • European Opening Calls From IG: #FTSE 7392 +0.53% #DAX 13346 +0.48% #CAC 5955 +0.60% #AEX 607 +0.74% #MIB 23509 +0.77% #IBEX 9622 +0.61% #STOXX 3754 +0.61%
  • Traders should know how to confidently approach, enter and exit both Bull or Bear markets. Need some insight into it? Get it from @nickcawley1 here: https://t.co/GhvvFrB3gz https://t.co/IbzSBk5Hb1
  • Join @DavidCottleFX 's #webinar at 3:00 AM ET/8:00 AM GMT for your weekly update on the top Asia Pacific market drivers that traders should watch this week. Register here: https://t.co/HNf3Axw8s5 https://t.co/iMMiza1J1d
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/im72E4Szmi
  • The Riksbank – the world’s oldest central bank - will exit its negative interest rate policy for the first time in known history as officials explore uncharted territory with unknown consequences. https://www.dailyfx.com/forex/fundamental/article/special_report/2019/12/16/Worlds-Oldest-Central-Bank-to-Exit-Negative-Rate-Policy-First.html
  • The Indonesian Rupiah, Malaysian Ringgit, Philippine Peso and Singapore Dollar may continue their rise against the US Dollar on global optimism amid a US-China trade deal #ASEAN #IDR #PHP #USD - https://www.dailyfx.com/forex/fundamental/article/special_report/2019/12/16/Indonesian-Rupiah-Malaysian-Ringgit-May-Rise-on-US-China-Deal.html?CHID=9&QPID=917702 https://t.co/GYaUYookwM
  • LIVE NOW: In this session, Currency Analyst @ZabelinDimitri will preview the upcoming week's main political themes and discuss their impact on financial markets. https://www.dailyfx.com/webinars/146770987
  • LIVE IN 30 MIN: In this session, Currency Analyst @ZabelinDimitri will preview the upcoming week's main political themes and discuss their impact on financial markets. https://www.dailyfx.com/webinars/146770987
  • How will the $JPY respond as the Bank of Japan appears to begin walking back from years of assuring the markets that ‘powerful monetary easing’ would be enough to stoke inflation? Get your market update from @DavidCottleFX here:https://t.co/ETZgk4xf5U https://t.co/ArTaaTninN
DAX Goes Kaput, but for Only a Minute, or Longer?

DAX Goes Kaput, but for Only a Minute, or Longer?

2017-03-22 08:22:00
Paul Robinson, Currency Strategist
Share:

What’s inside:

  • DAX triggers rising wedge formation with conviction
  • More losses to come
  • General global ‘risk-off’ environment expected

Looking for trading ideas? See our Trading Guides.

Yesterday, the DAX was hanging out on the bottom of the rising wedge we’ve been discussing lately, then the U.S. opened for business, and just like that the bottom of the wedge gave out. A strong afternoon drop in Frankfurt put the DAX solidly below the under-side of the pattern and December trend-line. Unsurprisingly, the pounding in Europe/US carried over into Asia trade, where the Nikkei took a 2%+ hit overnight, dropping below the under-side of an ascending wedge it had been building since the very beginning of the year.

'Risk-off' for only a minute, or longer?

The target is the bottom of the rising wedge formation, which doesn’t arrive until just under 11500. So, with that in mind, we expect a decent amount of selling to ensue in the foreseeable future. Rising wedges when triggered to the downside, in a market which has been rising for an extended period of time, tend to lead to aggressive sell-offs. Market participants are caught leaning the wrong way as the market suddenly breaks against a period of accumulation, as evidenced by the sequence of higher highs and higher lows carved out throughout the construction of the rising wedge. And given that equity markets by nature are long-biased they tend drop much faster than they do rise.

There are support levels on the way down to keep in mind, but should only act as speed bumps if the decline is to take hold as expected. (11834, 11722, then 11480 - bottom of wedge.)

Long story short – we’re looking for an extended decline to unfold. As we warned in the weekly forecast: The DAX won’t make a big move by itself.

DAX: Daily

DAX Goes Kaput, but for Only a Minute, or Longer?

Created with TradingView

See the Webinar Calendar for a schedule of upcoming live events with DailyFX analysts.

---Written by Paul Robinson, Market Analyst

You can receive Paul’s analysis directly via email by signing up here.

You can follow Paul on Twitter at @PaulRobinonFX.

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

DISCLOSURES

News & Analysis at your fingertips.