Chart of the day

DAX is testing the strong upside resistance of 17000 which is now a new top and a possible fifth wave top. To extend higher, we must see a confirmed break above 17000 to confirm that we will have the fifth upside wave extension even higher possible but the reversal here will lead to a swing down. We have an ECB meeting today which will give a guidance on interest rates.

A rejection here does not invalidate the fifth wave it just means we will have a swing pullback. We need to see a clear confirmed break below 14000 for the upside fifth wave to be confirmed as finished and for the short trade entry medium-term to be justified. Until we see a confirmed break above 17000, we will be in a swing range and can only trade swing short or long and I expect a pullback here.

Short trades could be opened here with a stop just above 17100. Long trades should be opened only upon a confirmed break above 17100 and stops taken out. The instrument is making a key consolidation ahead of the directional trade.