First week of the year ended with huge bearish candle. High volume confirms that it wasn’t just an accident. Since beginning of December volume of bearish candles is significantly higher than bullish ones. The theory of new low in front of us is strengthen.
On Monday there is no relevant macro data. On Tuesday 4 members of central banks will have their speech – Fischer and Lacker from FED and Praet and Lautenschläger from ECB. More important will be those from FED members because there can be some hints about January meeting. The most important news of the month will happen on January 27th – FOMC decision about interest rates in the US. Market expectations assumes no change on this meeting, but the minutes will be very interesting and can show some important information about future decisions.
IF YOU ARE INTERESTED IN INVESTING ON INDICES LIKE DAX30, TRY FREE FXGROW ACCOUNT
According to wave theory it is very probable that DAX is now in wave C – bearish one. If the 2015 low will be broken the target of decreases will be 2014 low – 8,350 pts. This level is additionally strengthened by principle A=C so even those who don’t use wave theory can see here simple correction.
There is also more optimistic scenario. Current move can be wave 2 of new bullish impulse. In this case DAX is close to the bottom and gains will be very dynamic and will have multiple gaps. Normally wave 2 ends on 78.6% retracement of the first one, there is no much place to this point.
