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
EUR/USD
Mixed
Oil - US Crude
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
Wall Street
Bearish
Gold
Bullish
GBP/USD
Mixed
USD/JPY
Mixed
More View more
Real Time News
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Silver: 0.22% Oil - US Crude: -0.12% Gold: -0.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/7UGWflcF7Y
  • - #NZDCHF outlook bearish as the pair struggles to surmount key resistance range - #NZDCAD trading at 13-month highs, but are technical cues hinting at a pullback? - #AUDNZD is again retreating from five-year resistance – how much will it decline? https://www.dailyfx.com/forex/market_alert/2020/07/08/New-Zealand-Dollar-Analysis-NZDCHF-NZDCAD-AUDNZD.html
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.08% 🇪🇺EUR: 0.00% 🇨🇦CAD: 0.00% 🇨🇭CHF: -0.04% 🇦🇺AUD: -0.10% 🇯🇵JPY: -0.12% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/lTYr3UzRhP
  • RT @DanielGMoss: A ‘second wave’ of #COVID19 cases threatens to hamper #Australia's tentative recovery Uncertainty around the future of fi…
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.26%, while traders in NZD/USD are at opposite extremes with 72.66%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/ksJ0N2pq6W
  • A macro forex trading guide exploring how to trade the Euro vs the Swedish Krona and Norwegian Krone through the prism of the Core-Perimeter model. Get your market update from @ZabelinDimitri here:https://t.co/n6zwlZJmGO https://t.co/F8sLZvRG1q
  • If you missed today's session on IG Client Sentiment where I discussed the outlook for the #DowJones, $AUDUSD and $USDCAD while discussing fundamentals and technicals, check out the recording below and stay tuned for a full report! - https://t.co/2wVxhtItzX
  • Wall Street Futures Update: Dow Jones (+0.213%) S&P 500 (+0.175%) Nasdaq Composite (+0.242%) [delayed] -BBG
  • RT @margaretyjy: Watch my Bloomberg TV interview at 9:00AM Singapore time. Coming in soon! https://t.co/Z6u6offept
  • The Core-Perimeter trading model helps traders understand interactions between global economies, helping to trade the assets embedded in these relationships. Get your market update from @ZabelinDimitri here:https://t.co/dKRAo00lfA https://t.co/jw5uvZBvRx
DAX Trading Towards Gap-fill, Break of H&S Neckline

DAX Trading Towards Gap-fill, Break of H&S Neckline

2017-07-24 08:24:00
Paul Robinson, Strategist
Share:

What’s inside:

  • Post-ECB drop accelerates Friday, gap-fill likely
  • H&S top to trigger on a move much lower from here
  • Will require strong bullish price action to negate current bearish bias

What major factors are expected to impact the DAX & Euro in Q3? Find out here!

To end last week, we were noting DAX weakness post-ECB with the help of the euro continuing to bulldoze its way higher. The euro has been weighing on European stocks, but sharp event-driven moves really highlight this inverse relationship. The Thursday intra-day drop turned into a material down-day on Friday, which pushed the German index into the gap created following the first round of the French elections. We’re very near triggering the H&S topping formation, too, with price thus far today trading below the neckline. It’s all about the daily closing print below, though, to avoid fake-outs. A close below the neckline, whether today or a couple of days from now, is a likely scenario with the DAX still sitting over 150 points away from filling the gap.

The gap-fill is the first form of support, and below there the next level of price support comes in around 11941, the April low. The March low at 11850 could be of minor significance, but we’ll be placing more emphasis on the 200-day which currently clocks in just over 11800. Turning to the ‘textbook’ way of deriving the target once an H&S pattern triggers, the ‘measured move target’ clocks in at around 11645. It’s simply calculated as the distance from the head to the neckline subtracted from the point where price breaks the neckline.

What would take the bearish scenario off the table? First-off, given the DAX is trading in a major gap, to reiterate, probability favors this air pocket getting filled before finding any real support. In that case, as stated earlier, the neckline will have been broken and we’ll have our topping formation confirmed and down-move well underway. If the move lower is to be cut short we’ll need to see bullish price action at one of the beforementioned support levels. A big reversal and follow-through to the top-side will need to develop. If the DAX were to not fill the gap and hold right around current levels, we would still need to see a strong shove higher which negates the bearish trend in place since the peak in June.

DAX: Daily

DAX Trading Towards Gap-fill, Break of H&S Neckline

Paul conducts webinars every week from Tuesday-Friday. See the Webinar Calendar for details, and the full line-up of all upcoming live events.

---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.