Oil And DAX Approach Important Supports

If you like emotional trading, there’s no better time than now! Strong direction, volatile movements and plenty of opportunities across the market. We have interesting setups on almost all types of assets: commodities, currencies, and indices.

Let’s start with oil, where the price is constantly flirting with long-term lows. Demand for this commodity remains low and the threat of a prolonged price war in OPEC remains significant. Technically, after last week’s drop, the price created a pennant, which was promoting a breakout to the downside. The price indeed broke the lower line of this pattern and went even lower. As long as we are above 28 USD/bbl, there’s no panic but the pressure on that support is rising. A breakout, which is quite probable, could be potentially catastrophic.

Let’s take a look at the DAX, which quickly killed yesterday’s positive sentiment and is now breaking the lower line of the wedge pattern. This breakout is promoting a movement to the downside. We can assume that this setup will be reliable as the DAX has recently been good at respecting the trend continuation patterns. In March, we already had one wedge and a nice descending triangle pattern. It seems that another test of the 8200 mark is the base option for the DAX right now.

We must talk about the EUR/PLN again today. We were bullish about this pair from the beginning of March. We saw this beautiful inverse head and shoulders pattern and we anticipated the movement to go up. Although expected, the scale of the movement was still surprising even to us. The price is now almost 2000 pips higher. What helped a lot here was the breakout of the upper line of the symmetric triangle pattern and the breakout of the highs from 2019 and 2018 (around 4.4). The next target here is the 2016 highs of 4.5.