DAX (DE40) reversal? GBP/USD in rising wedge [Video]
|Despite the threats from dictators, supply problems and pipeline sabotage, the price of Natural Gas is still falling but price action is forming a Falling Wedge heading into winter.
MACD is still bearish though but the signal line could pop out at any time.
We also see key Fibonacci levels on the daily chart with support at the 61.8% level and key levels above at the 50% level so watch for the bounce to the upside or a break to the downside.
Yesterday we promised to take a look at the indices from a technical standpoint so let’s start with the DAX where we may have a reversal.
On the daily chart we can see an inverted hammer and price action unsuccessfully trying to break this level of support at 11800.
Also, the Stochastic Oscillator is still moving up and we are waiting for the signal line on MACD to move out of the bearish histogram.
Also, the Parabolic SAR has changed from bearish to bullish.
As we noted yesterday, the FTSE index of the top UK companies bounced off support and is heading higher.
However, watch out for this upper trend line and the stochastic oscillator is overbought.
Also, from the fundamental standpoint, with GBP getting stronger, the FTSE may fall back to support at around 6800.
Speaking of GBP, the recovery we looked at yesterday is still in progress with many pairs breaking levels of resistance.
If we look specifically at GBPUSD, we see price action forming this Rising Wedge, which is a bearish pattern.
Also, the Stochastic Oscillator, which had been quite bullish, is now quite overbought and about to turn down.
We are waiting for tomorrow’s New Zealand Interest Rate decision to see if the news drives price action to the upper trend line on NZDCAD, for example.
If so, the downtrend could continue however, a big number could see price action break the trend line and continue higher.
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