dax daily outlook thurs 09 june 2016 maintain bearish bias within range configuration 1815052016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has continued to drift lower below the predefined upper limit of neutrality range at 10350.

Please click on this link for a recap on our previous daily short-term outlook/strategy.

Today key Eurozone economic data releases as follow:

• Germany Trade Balance for Apr (EUR23.0Bn est.) @0600 GMT
• Germany Exports (m/m) for Apr (-0.6% est.) @0600 GMT
• Germany Imports (m/m) for Apr (1.2% est.) @0600 GGT

Key elements

• The 4 hour Stochastic oscillator is oriented to the downside and still has room to manoeuvre (depicted by the pink box) before reaching an extreme oversold level.
• The shorter-term hourly Stochastic oscillator has reached its extreme oversold which highlights the risk of a minor/short-term rebound.
• The short-term intermediate resistance to watch will be at 10265 which is yesterday’s minor swing high area formed during the European sesson.
• The near-term supports rest at 10080 (the minor swing low of 03 June 2016 that has tested the former swing high areas of 10 May, 12 May and 17 May 2016) and 9960 (former range congestion from 18 May to 23 May 2016 and close to the a Fibonacci cluster)

Key levels (1 to 3 days)

Intermediate resistance: 10265

Pivot (key resistance): 10350

Supports: 10080 & 9960

Next resistance: 10530/650

Conclusion

Maintain bearish bias with “triangle range” configuration. As long as the 10350 pivotal resistance is not surpassed, the Index is likely to see a further potential down to target 10080 before 9960.

On the other hand, a clearance above the 10350 resistance is likely to invalidate the bearish expectation for a further squeeze up towards the next resistance at 10530/650 (21 April 2016 swing high and the upper boundary of the descending channel in place since 12 April 2015).

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