dax daily outlook tues 14 june 2016 further potential decline below 96659750 resistance 1815722016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has continued its waterfall decline from last Friday, 14 June 2016 as it broke below the lower boundary of the minor triangle range configuration in place since 06 May 2016 low.

Please click on this link to recap the details as per highlighted in our latest weekly technical outlook/strategy published yesterday.

Today key Eurozone economic data releases as follow:

• Eurozone Industrial Production for Apr (1.3% est. for y/y & 0.7% m/m est.) @0900 GMT
• Eurozone Employment Change for Q1 @0900 GMT

Key elements

• Based on the Elliot Wave Principal and fractal analysis, the Index has appeared to be undergoing a minor extended bearish implusive wave 3 down movement in place since 07 June 2016 high of 10316. The potential projected target (2.618) of the minor impulsive wave 3 stands at 9440 which also confluences with swing low area of 07 April 2016 and the 61.8% Fibonacci retracement of the rally from 11 February 2016 low to 21 April 2016 high at 9430.
• The hourly (short-term) Stochastic oscillator has just reached its overbought region coupled with the daily (medium-term) RSI oscillator that has yet to reach an extreme oversold region. These observations suggest that short-term downside momentum of price action remains intact.
• The key short-term pivotal resistance stands at 9750 which is defined by the swing low of 06 May 2016 and the 23.6% Fibonacci retracement of the recent steep decline from 07 June 2016 high of 10316 to today’s current intraday low.

Key levels (1 to 3 days)

Intermediate resistance: 9665

Pivot (key resistance): 9750

Support: 9440/30

Next resistance: 9840/934

Conclusion

Maintain bearish bias. Any potential minor rebound is likely to be capped by the intermediate resistance of 9665 with a maximum limit set at today’s short-term pivotal resistance of 9750 for another round of potential downside movement to target the 9440/30 support.

On the flipside, a clearance above the 9750 short-term pivotal resistance is likely to put the bears on hold to see a steeper snap-back rally to retest the pull-back resistance of the former minor triangle range’s support at 9840/934.

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