Unusual trading activity will be prevalent today as it is month end, quarter end and for some – financial year end. It is a time when investors look to balance their books. One has to only look at how the DAX has responded to positive European data in this mornings session.
Deflation in the eurozone persisted in March but the rate of decline slowed, easing concerns that the economy faces a dangerous spiral of falling consumer prices. Prices were down 0.1 percent in March, less than the drop of 0.3 percent in February. Germany’s jobless rate hit a record low of 6.4 percent in March, which was the lowest since German reunification in 1990. Eurozone Unemployment also dropped down to 11.3 percent in February, down from a revised 11.4 percent in January and 11.8 percent a year before in a further positive sign – but slightly higher than expectations of 11.2%.
Looking at the Hourly chart below, price has failed to close above yesterday’s highs (mentioned as profit targets in yesterday’s article http://theshielreport.com/dax-intraday-levels-30th-march/ ) at 12105 and has since sold off sharply.
(click to enlarge)
CONCLUSION – BULLISH
It would be more sensible to let today play out and look at trading tomorrow as the possibility for whipsaw activity is high. Markets will be volatile in trading today, so pinpointing certain levels with tight stops is essential if you are inclined to to trade.
For bulls, buying opportunities reside in the current Fib retracements from the low yesterday to today’s high (11844/12121). This would be 12015, 11983 & 11950. (See 5 minute chart below – MOVE fib levels up as appropriate). Below that the Hourly 200 moving average (green line in chart above) currently at 11928. Finally, if the opportunity presents, at the 11850 zone. This area currently intersects the downwards trendline which price broke through in trading yesterday – now an important level to hold for bulls.
For bears, shorting opportunities are at pullbacks into the 100 & 200 MA’s on the 5 min chart, currently at 12062/12073. Above that, the highs of today at 12121.
(click to enlarge)
Bearish targets :-
- Hourly 200 MA (Currently 11928)
- 11915 (Extension of daily range – 207 pips average trading range over the last 22 days. Also close to Daily S1 Pivot 11911)
- 11844 (Yesterday’s low & bottom end of 11850 zone)
Bullish targets :-
- 12169 (Daily R1 Pivot)
- 12202 (Extension of daily range & close to psychological price of 12200)
- 12267 (Daily R2 Pivot)