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The pullback now should be complete

Failed at the 20 Daily SMA in Dax, Now Trying the 50 SMA

Posted Thursday, July 30, 2020 by
Skerdian Meta • 1 min read

Stock markets have been quite bullish since the crash in March ended. The German index DAX 30 climbed from around 8.300 points  in March, to 13,300 points by the middle of last week. But, the price started to retrace lower, after the upside-down daily candlestick last Wednesday.

Dax retreaced around 500 pips lower, and the 20 SMA (grey) was providing support earlier this week on the daily chart. The pullback also seemed complete and since the trend was bullish, we decided to take our chances and open a buy forex signal at the 20 SMA.

Dax hanged around there for a few sessions, but it tumbled lower today, as the sentiment turned negative again, after the disappointing results from European car manufacturers. Stock markets dived lower, and Dax lost an additional 500 points today, so our buy signal failed. Although, we tried again and went long at the 50 SMA (yellow). Now the price is retreating and we’re nearly 100 pips in profit with this trade, but we are targeting the 20 SMA at least, which is 600 points higher.

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