*Apologies to my regular subscribers; I have been rather ill the last few days and out of action*
Fear and pessimism continues & lingers in the air over global equity markets as traders and investors alike eagerly await news out of Greece. A Greek official told Reuters that Greece will default on its €1.6 Billion loan due to the International Monetary Fund later today – see full article here
A default in the eyes of many if Greece do not pay up, but how about the ECB? They seem to be at the ready to prop up the European banking system and this article is a worthwhile read.
Let’s jump straight into the technicals. Looking at the Hourly chart of the DAX below, one can see that price has fallen off a cliff since markets opened on Sunday evening for the Asian Session, continuing to plummet further throughout the European session – a total of 663 pips!
(click to enlarge)
CONCLUSION – NEUTRAL
PROCEED WITH EXTREME CAUTION IN TRADING TODAY.
The markets are highly volatile and susceptible to massive swings in price. There is Market risk, Event risk and Liquidity risk to consider whilst trading today.
For bulls, the 10892/10856 zone has been a stalwart of support since the beginning of June, with price piercing below this level on three occasions yet failing to close below this zone. See 4 Hourly chart below for more detail. You will also notice that the 10800 is the line in the sand for bulls, so watch these areas closely today, if price comes to test them. For risk averse, price needs to start to reclaim the 11018/10986 zone.
For bears, the line in the sand intraday is the Hourly 200 moving average (green line in the chart above). Above that bears will be eyeing the 11328/11316 zone to lean against with defined risk to short at, then the 11467/11457 zone and finally the 11606/11595 zone. For risk averse, 10800 needs to break.
(click to enlarge)
Bearish targets :-
- 10856 (Low end of key zone + yesterday’s low)
- 10800 (June low)
- 10682 (Daily S1 Pivot)
Bullish targets :-
- 11174 (Key zone)
- Hourly 200 MA
- 11328/11316 zone + close to Daily R1 Pivot 11338