A fairly quiet day on the news front, just some data released from China over the weekend. Chinese exports slumped 8.3% for the month of July, and producer prices slumped to the lowest level since 2009. This has helped bolster global equity markets somewhat in trading today over investor sentiment growing towards more Chinese monetary stimulus in the not too distant future – see full article here
Looking at the Hourly chart of the DAX below one can see that despite the sell off during last week, price is still in an uptrend. Bears pushed the market lower this morning but price managed to stay above the 200 Hourly moving average (green line in the chart below), which also coincides with the upwards diagonal trendline in red. Price failed to close below the 11467/11457 area, a key zone going all the way back to the beginning of March.
(click to enlarge)
CONCLUSION – NEUTRAL
This view will turn Bullish when the Hourly 100 MA (blue line in the chart above) is taken out and price closes above this level for a few bars. It will turn Bearish when price breaches the Hourly 200 MA & upwards trendline – currently at 11411. At the moment, Bulls & Bears are fighting it out between the two moving averages.
For Bulls, as mentioned, price ideally needs to clear the Hourly 100 MA, this will be a safer entry point for risk averse traders by leaning against the Hourly 100 MA as support. However some value traders will be buying dips into 11467/11457 zone and Hourly 200 MA.
For Bears, shorting opportunities with defined risk are into the Hourly 100 MA, today’s highs of 11563 and into the 11606/11595 zone. Risk averse traders will be stepping in on a break of the Hourly 200 MA.
Bearish targets :-
- 11467/11457 zone + close to Daily S1 Pivot 11463
- Hourly 200 MA + close to Daily S2 Pivot 11413
- 11371 (Extension of Daily range – 22 day average is 191 pips)
Bullish targets :-
- 11563 (Daily highs)
- 11606/11595 zone
- 11622 (Extension of Daily range)