Hi Traders! Dax short term forecast follow up and update is here. On August 1st I shared this “Dax Technical Analysis And Short Term Forecast” post in our blog. In this post, let’s do a recap of this setup and see how it has developed now. If you would like to learn more about the way we trade and the technical analysis we use then check out the Home Trader Club. Spoiler alert – free memberships are available!
My Idea:
On the H1 chart, the price which was moving higher has reached a key resistance zone that has formed based on the 61.8%(16576.69) Fibonacci expansion level of the first wave. This key resistance zone coincides with the H4 key resistance zone, which makes this a very strong powerful zone. The price which is moving higher has reached this zone, respected it and is bouncing lower from it. Also, we have a bearish divergence that has formed between the first high that has formed at 16447.80 and the second high that has formed at 16531.80 based on the MACD indicator which we may consider as evidence of bearish pressure. Also, the price which is moving lower has broken below the most recent uptrend line which we may consider as another evidence of bearish pressure. In addition to this, the ADX indicator gave a bearish signal here as well at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads value over 25 which we may consider as yet another evidence of bearish pressure. So everything looks good here for the bears and until the key resistance zone (marked in red) shown in the image below holds my short term view remains bearish here and I expect the price to move lower further.
Dax H1(1 Hour) Chart Current Scenario
Based on the above-mentioned analysis, on the H1 chart, my short term view was bearish and I was expecting the price to move lower further until the key resistance zone holds. The price action followed my analysis exactly as I expected it to here. After the bearish divergence and the breakout of the most recent downtrend line. The price also broke below the last low and created lower lows which is a sign of gaining momentum towards the bearish side. Most importantly there were no signs opposing this short term bearish view. The price then moved lower further as I expected it to and delivered a fantastic move to downside as you can see in the image below!
So, traders, this is why I wanted to show this example to help you understand how important it is to follow the facts. The facts were supporting the bearish view here, and there were no signs against it. When the facts do happen as we expected, you can see how the price perfectly moved as per the plan. Because these are the kind of hints the market provides us with the majority of the time, it’s our obligation as traders to be able to listen to these things that the market tells us, and we should try to make the right actions accordingly.
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Happy Trading!
Arvinth Akash
Home Trader Club Team.
