Matt Simpson, CFTe, MSTA
CityIndex
If the DAX can hold current support levels before breaking to new cycle highs, it could reaffirm the strength of its bullish channel.
The DAX has seen some large swings around the 200-day eMA, although a decent trend structure is emerging within a bullish channel on the daily chart. Prices are consolidating near 6-month highs after gapping above the September lows, and the consolidation has found support around the 8-day eMA and structural levels. Moreover, the 8 and 21-day eMA’s are pointing higher and fanning out to show bullish momentum is picking up.
For a more convincing momentum breakout, we’d prefer to see prices hold above immediate support and break above 12,030 to assume trend continuation. If a deeper retracement is to materialise, we’d look for the 11,750 region to hold before waiting for bullish momentum to return (as this is where the 38.2% Fibonacci retracement and lower-gap reside, making it a relatively healthy correction level).
A break below the 11,750 region puts it onto the backburner until the trend becomes clearer. Also, take note that the 200-day eMA and lower channel could provide likely support levels, which makes short trades on the daily timeframe less desirable, in terms of reward/risk potential.
CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed
Recommended Content
Editors’ Picks
AUD/USD pressures as Fed officials hold firm on rate policy
The Australian Dollar is on the defensive against the US Dollar, as Friday’s Asian session commences. On Thursday, the antipodean clocked losses of 0.21% against its counterpart, driven by Fed officials emphasizing they’re in no rush to ease policy. The AUD/USD trades around 0.6419.
EUR/USD extends its downside below 1.0650 on hawkish Fed remarks
The EUR/USD extends its downside around 1.0640 after retreating from weekly peaks of 1.0690 on Friday during the early Asian session. The hawkish comments from Federal Reserve officials provide some support to the US Dollar.
Gold price edges higher on risk-off mood hawkish Fed signals
Gold prices advanced late in the North American session on Thursday, underpinned by heightened geopolitical risks involving Iran and Israel. Federal Reserve officials delivered hawkish messages, triggering a jump in US Treasury yields, which boosted the Greenback.
Bitcoin Price Outlook: All eyes on BTC as CNN calls halving the ‘World Cup for Bitcoin’
Bitcoin price remains the focus of traders and investors ahead of the halving, which is an important event expected to kick off the next bull market. Amid conflicting forecasts from analysts, an international media site has lauded the halving and what it means for the industry.
Is the Biden administration trying to destroy the Dollar?
Confidence in Western financial markets has already been shaken enough by the 20% devaluation of the dollar over the last few years. But now the European Commission wants to hand Ukraine $300 billion seized from Russia.