Further to yesterday's article, the DAX (FXCM's GER30 CFD) did bounce off of support. However, the RSI has normalised, and the longer term-trend bias may reassert itself. The daily chart is still positioned in its weak area between the lower blue and red bands. The normalisation of the oscillator took the price to the R2 pivot on the hourly (rightside chart), where it found resistance. The index has reacted off this critical level, and our attention now turns to the EMAs. If they cross bearishly, they will follow the stochastic that has already been turned down (black ellipses) and potentially set up for further weakness. In this regard, the stochastic's position will be an important tell. If it declines to 20 and under, a bearish momentum will build, adding pressure to the index.
Senior Market Specialist
Russell Shor joined FXCM in October 2017 as a Senior Market Specialist. He is a certified FMVA® and has an Honours Degree in Economics from the University of South Africa. Russell is a full member of the Society of Technical Analysts in the United Kingdom. With over 20 years of financial markets experience, his analysis is of a high standard and quality.