The DAX moved lower and lower in trading yesterday after following the lead bias of the U.S. open at 14:30 GMT. The DOW dropped into negative territory, along with nine of the ten major S&P sectors moving lower after anxiety continued to fester amongst investors over the prospects of an early rate hike by the Fed based on Friday’s stronger than expected jobs number. This selloff continued during the Asian session today as a result, along with fears over a Greek default – see full article here
Looking at an Hourly chart of the DAX below, one can see that after the 11193/11174 was broken, price didn’t look back. It managed to take out the downwards sloping trendline in place since early April (see yesterday’s article for more details), to then attack the 11018/10986 level which provided some respite for long term bulls.
(click to enlarge)
CONCLUSION – BEARISH
This bias remains in place until the Hourly 100 moving average (blue line in chart above) is reclaimed once again, more ideally the Hourly 200 MA.
For bulls, price needs to reclaim the 11018/10986 zone in trading today for any hope of this market turning around. Bull support zones in trading today are moves above 11018/10986 zone and into the 10892/10856 zone. If this zone is breached, strong support in the coming days will be at 10800, 10700, 10600 and the 200 Day MA, currently at 10507. For risk averse, price needs to move above the Hourly 200 MA and close for several bars.
For bears, expect to see shorts enter into the market on any rallies into the 11018/10986 zone, the 100 & 200 MAs on the 5 minute chart, with the final line in the sand being the Hourly 100 MA in trading today.
Bearish targets :-
- 10892 (Top end of 10892/10856 zone)
- 10854 (Extension of Daily range – 22 day avg. 217 pips + close to Daily S2 Pivot 10849)
- 10800
Bullish targets :-
- 11071 (Daily high + close to Daily Pivot 11080)
- 11139 (Extension of Daily range)
- 11170 (Daily R1 Pivot + into 11193/11174 zone)