Hi Traders! Dax short term forecast and technical analysis 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 evidences 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 Traders Academy Club Spoiler alert – free memberships are available! Let’s start our analysis from the highest timeframe which will be the daily chart here.
Dax D1(Daily) Chart Analysis – Strong Support Zone, Bullish Divergence, ADX Indicator, Parabolic Sar
On the daily chart, the price which was moving lower reached a strong support zone, respected it and is currently bouncing higher from this zone. In addition to this, we also have a bullish divergence that has formed between the first low that has formed on 7th March 2022 and the second low that has formed on 5th July 2022 based on the MACD indicator which we may consider as evidence of bullish pressure. Also, the ADX indicator gave a bullish signal here at the cross of +DI (green line) versus -DI (red line) and the main signal line (silver line) reads value over 25, we may consider this as another evidence of bullish pressure. Looking at the Parabolic Sar, we could see that the dots are below the price which we may consider as yet another evidence of bullish pressure. So everything looks good here for the bulls and we may now move down to lower timeframe and see if we can find evidences supporting this bullish view.
Dax H1(1 Hour) Chart Analysis – Heikin Ashi Candles, Bullish Trend Pattern, Two Strong Support Zones
On the H1 chart, based on the Heikin Ashi candles we can see that currently, we have strong bullish bodies in upward moving market conditions so it basically reflects a bullish environment. Also, the price which is moving higher has created a bullish trend pattern in the form of three higher highs, higher lows, we may consider this as another evidence of bullish pressure. Generally, after a bullish trend pattern, we may expect corrections and then potential continuation higher. Currently, it looks like a correction is happening, also we had two strong resistance zones that has formed and the price which was moving higher has broken above these zones and is holding above them. After the breakout these strong resistance zones are acting as two strong support zones for us. Until both these strong support zones shown in the image below holds my view remains bullish here and I expect the price to move higher further.
Technical Analysis & Forecast Summary
Dax D1(Daily) Chart Analysis
- Strong Support Zone, Bullish Divergence, ADX Indicator, Parabolic Sar
Dax H1(1 Hour) Chart Analysis
- Heikin Ashi Candles, Bullish Trend Pattern, Two Strong Support Zones
Trading Tips
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 buy setup then you can use any setup and strategy that you have in your arsenal to look for bullish moves and join this buy trade.
Also, don’t forget to protect your buy 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
