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 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 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 161.8%(13440.79) Fibonacci expansion level of the first wave and the 100%(13499.88) Fibonacci expansion level of the second wave. Also, we have a bearish divergence that has formed between the first high that has formed at 12946.30 and the second high that has formed at 13445.30 based on the MACD indicator which we may consider as evidence of bearish pressure. In addition to this, 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 lower timeframe and look for evidences supporting this short term bearish view.
On the H1 chart, we have a bearish divergence that has formed between the first high that has formed at 13354.50 and the second high that has formed at 13445.30 based on the MACD indicator. The price then moved lower and broke below the last low at 13215.30 thus forming a classical setup of bearish divergence followed by bearish convergence, we may consider this as evidence of bearish pressure. As per the book scenario after a bearish convergence we may expect corrections and then further continuation lower. Currently it looks like a correction is happening. In addition to this, the price has also broken below the most recent uptrend line which we may consider as another evidence of bearish pressure. 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 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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