The DAX is trading on very thin volume today as it is a National Holiday in the Major markets in Europe & Asia. It has been a volatile week which has seen the dollar collapse in value, bond yields soar and stock markets in Europe and the United States weaken. Mostly a result of poor U.S. first quarter growth numbers on Wednesday, which sent the dollar down 6% & has seen European equity markets tumble over the last four days.
A new day, a new month and we are back to waiting to see if the U.S. economic slowdown will reverse in the coming months. Yesterday, there were better signs from U.S. unemployment data with the number of Americans applying for first-time unemployment benefits tumbling last week to the lowest level in 15 years and today the main focus will be the ISM survey of U.S. manufacturing sentiment.
Looking at the Hourly chart of the DAX below, one can see price did indeed challenge the 11457/11467 as suspected in yesterday’s article and break above it. But alas, the rally was short lived lasting only three hours before dropping back below and attempting to retest the daily low of 11328.
(click to enlarge)
CONCLUSION – NEUTRAL
It would be wise for one to sit on their hands today, due to the nonexistent volume present in the DAX, as a result of the major European bourses being closed.
For bulls, price really needs to attack the 11457/11467 level and hold against it on any retests. Above that zone, the next targets will be yesterday’s high of 11565 and ultimately a test of the 11595/11606 zone.
For bears, shorting opportunities reside against the 11457/11467 zone or on a break of the 11328/11316 area. 11328 being yesterday’s session low and 11316 being the 50% retracement in price from the ECB announcement late-January of QE to the all-time highs seen last month.
Bearish targets :-
- 11328 (Yesterday’s Low)
- 11298 (Daily S1 Pivot)
- 11210 (Extension of Daily range vs 22 day avg. of 216 pips)
Bullish targets:-
- 11534 (Daily R1 Pivot)
- 11565 (Yesterday’s high)
- 11604 (Extension of Daily range & into 11600 zone)