dax short term pull back completed potential direct rise in progress 1821462016

Daily Outlook, Thurs 14 July 2016

(Click to enlarge charts)

What happened earlier/yesterday

The Germany 30 Index (proxy for the DAX futures) has staged a pull-back but it is only very minor in nature to print a low of 9899 in the late European session (shed only 1.16%).

The pull-back in price action seen yesterday did not hit the upper limit of the predefined short-term support zone of 9810/750 but it can be considered as completed (more details as per highlighted below).

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

Key elements

• Yesterday’s slide in price action has retested the pull-back support of a former short-term ascending channel’s resistance bullish breakout at 9905. Current price action has managed to stage a rebound from the aforementioned pull-back support at 9905. These observation suggest a bullish acceleration see in price action (see 1 hour chart).
• The 4 hour Stochastic oscillator has continued to inch upwards and still has room for further upside before reaching an extreme overbought level. These observations suggest that upside momentum of price action remains intact.
• The short-term key support now rests at 9770 2which is defined by the former minor swing high areas of 01 July/04 July 2016 and the 38.2% Fibonacci retracement of the recent rally from 06 July 2016 low to today’s (14 July) current intraday high.
• The short-term key resistances stands at 10180 (“Expanding Wedge” range top) follow by 10370/480 (the minor swing high areas of 31 May/24 June 2016 – pre Brexit highs & Fibonacci projection cluster).
• Based on the Elliot Wave Principal and fractal analysis, the Index is likely to be in the midst of undergoing an intermediate term extended bullish impulsive wave 3/ from the 06 July 2016 low of 9309.

Key levels (1 to 3 days)

Intermediate support: 9905

Pivot (key support): 9770

Resistances: 10180 & 10370/480

Next support: 9510

Conclusion

Short-term pull-back is likely to have ended. As long as the 9770 daily short-term pivotal support holds, the Index is likely to see the continuation of its potential upside movement to test 10180 before targeting the next resistance at 10370/480.

On the flipside, a break below the 9770 short-term pivotal support is likely to invalidate the preferred bullish scenario to see another round of choppy decline to test the next support at 9510 within the “Expanding Wedge” range configuration.

Disclaimer

This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this email, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs. All queries regarding the contents of this material are to be directed to City Index, a trading name of GAIN Capital Singapore Pte Ltd.

Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.