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
Bullish
GBP/USD
Mixed
USD/JPY
Bearish
Gold
Bullish
Oil - US Crude
Mixed
Bitcoin
Mixed
More View more
Real Time News
  • USD/CHF, EUR/CHF Forecast: EUR & USD to CHF Price - Levels to Keep in Focus More details in the link below: https://www.dailyfx.com/forex/technical/home/analysis/usd-chf/2019/12/09/USDCHF-EURCHF-Forecast-EUR-USD-to-CHF-Price-Levels-to-Keep-in-Focus-MK.html?CHID=9&QPID=917714 https://t.co/IOBDTvR81T
  • Commodities Update: As of 15:00, these are your best and worst performers based on the London trading schedule: Silver: 0.25% Gold: 0.11% Oil - US Crude: -0.29% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/YqKis99iCh
  • $CAD & $MXN https://t.co/XZiWOgjVwR
  • CAD consumer confidence is up to 55.1 from 54.8 in the previous period $USDCAD
  • RT @VPatelFX: *AMLO: U.S. DECISION ON USMCA EXPECTED VERY SOON $MXN $CAD barely moves on this. Despite all the goodwill from Mexico to bud…
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.90%, while traders in US 500 are at opposite extremes with 77.51%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WpEi7e3ItW
  • A giant among policymakers. RIP. https://t.co/6raiEY0UDH
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Silver: 0.28% Gold: 0.13% Oil - US Crude: -0.52% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/7uYjqzMesi
  • US Treasury Yields Update: 2-Year: 1.613% 3-Year: 1.633% 5-Year: 1.651% 7-Year: 1.758% 10-Year: 1.819% 30-Year: 2.257%
  • The late-week reversal in $EURUSD rates was spurred on by the November US jobs report – not necessarily a sustainable source of gains if US-China trade war headlines turn around again. Get your market update from @CVecchioFX here:https://t.co/RP1iZSgAga https://t.co/87gB1aDTMc
DAX Chart Outlook – Weakening Posture Could Bring LT T-line into Play

DAX Chart Outlook – Weakening Posture Could Bring LT T-line into Play

2018-08-07 07:57:00
Paul Robinson, Currency Strategist
Share:

DAX Technical Highlights:

  • DAX broke lower parallel of month-long channel
  • Underwent sharp reversal yesterday on test of lower parallel
  • Price sequence bearish, but need to wait for trigger

For the intermediate-term fundamental and technical outlook for the DAX & Euro, check out the DailyFX Q3 Forecasts.

Last week, the DAX broke the upward channel from the late-June low, which as we noted in the weekly forecast over the weekend, puts the index in a semi-precarious position. Yesterday, the market attempted to trade higher, but once it nearly filled the 8/2 gap a sizable rejection ensued, keeping pressure on.

The price structure on the short-term time-frame (hourly chart) is carving out a head-and-shoulders pattern, and while not possessing the most symmetrical properties it’s good enough should it trigger. That is, price needs to decline below the neckline of the pattern before it can be considered validated.

Last week, we saw a textbook example with the S&P 500 as to why these technical patterns require a confirmed break of the neckline before we can run with their downward bias. The neckline is considered support until it’s broken, and as it turned out with the SPX no break of support meant no short which meant no losses on fresh shorts in anticipation of the pattern following through. Which turned out to be a good ‘no break’ as the S&P used support to springboard higher.

With that said, a solid break through the neckline is needed before a bearish bias can gain momentum. In the event of a breakdown, we could be quickly looking at the February 2016 trend-line, currently residing in the high 12200s. No break, then no trade.

At this time, the market is pushing higher and may attempt to leave behind the possibility of an H&S formation. Ahead, though, the 200-day (which acted as resistance back on 7/18) and a recapture of the lower parallel will be needed if more upside is to be seen.

DAX Daily Chart (Channel broken)

DAX daily chart, channel broken

Check out this guide to learn 4 core tenets for Building Confidence in Trading.

DAX Hourly Chart (Head-and-shoulders pattern)

DAX hourly chart, head-and-shoulders

One thing to be mindful of as we continue to head through this month. Trading can be relatively light and on the sporadic side in August in the absence of a catalyst (typically negative), as market participants leave the desk for vacation time. This can lead to a less-than-desirable trading environment, so if trade set-ups aren’t there, and this should go for anytime of the year, then don’t force the issue…

For live weekly updates on the DAX and other indices, join me live on Tuesdays for ‘Indices and Commodities for the Active Trader’.

Forex & CFD Trader Resources

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

---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

News & Analysis at your fingertips.