Hi Traders! Dax technical analysis and short term forecast is here. The way I would like to analyze the chart for setups is based on multi-timeframe confirmations because in my POV if we get more evidence on different timeframes for the same direction then it makes the setup much more reliable. 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! Let’s start our analysis from the highest timeframe which will be the H4 chart here.
On the H4 chart, the price which was moving higher has reached a key resistance zone that has formed based on the 261.8%(14261.73) Fibonacci expansion level of the first wave and the 100%(14482.80) Fibonacci expansion level of the second wave. Also, we have a bearish divergence that has formed between the first high that has formed at 14441.80 and the second high that has formed at 14676.80 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, the price then moved lower and created lower lows based on the MACD indicator, which is a sign of gaining momentum toward the bearish side. Also, currently, there are no signs opposing this short-term bearish view. So everything looks good here for the bears and we may now move down to a lower timeframe and look for evidence supporting this short-term bearish view.
On the H1 chart, the price which is moving lower has created a bearish trend pattern in the form of three lower highs, lower lows which we may consider as evidence of bearish pressure. Generally, after a bearish trend pattern, we may expect corrections and then a further continuation lower. Currently, it looks like a correction is happening. In addition to this, the ADX indicator gave a bearish signal here at the cross of -DI (red line) versus +DI (green line) and the main signal line (silver line) reads a value over 25 which we may consider as yet another evidence of bearish pressure. Also, we had two strong support zones that have formed and the price which was moving lower has broken below these zones and is holding below them, we may consider this as yet another evidence of bearish pressure. Currently, these strong support zones are acting as strong resistance zones for us. Until these two strong resistance zones (marked in red) shown in the image below hold, my short-term view remains bearish here and I expect the price to move lower further after pullbacks.
Dax H4(4 Hours) Chart Analysis
Dax H1(1 Hour) Chart Analysis
It is always recommended to look for confirmations before you jump into any trade. If you are not sure about how to trade this short-term sell setup then you can use any setup and strategy that you have in your arsenal to look for bearish moves and join this sell trade.
Also, don’t forget to protect your sell trade using a stop loss and make sure to set a target and keep a proper risk/reward ratio.
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Happy Trading!
Arvinth Akash
Traders Academy Club Team
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