- The German index initially did try to rally a bit during the trading session on Thursday but has given back gains as we continue to see a lot of concerns about the European Union.
- That being said, I still think there's a significant amount of support underneath, especially near the 19,750 euro level and then again, the 50-day EMA.
A pullback at this point in time should offer a bit of value in that area and judging by the candlestick for the trading session on Thursday, we may very well get that opportunity. On the other hand, if we were to turn around and break above the top of the candlestick for the Thursday session, that would be an inverted hammer being broke to the upside, which is a very bullish sign. In that environment, you have the $20,500 level targeted, which was the most recent swing high.
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On a Move Higher
If we were to break down below the 50 day EMA, then I think it opens up a move down to the 19,000 euros level, which is still very possible. But right now, I'm not looking for it. This is a market that's been in a very strong uptrend for quite some time, but it also looks like the markets have been rattled over the last couple of days with the nonsense coming out of the mouth of Jerome Powell. It's obvious that the Federal Reserve doesn't really know what it's doing, and the markets don't like that, while not directly influencing the German economy.
It certainly has a bit of a knock-on effect in what happens with not only Germany, but the rest of the world. So you could lay this at the feet of Jerome Powell. A short-term pullback, though, I think will attract enough attention that value hunters will be interested. We'll just have to see how that plays out because next Wednesday, of course, is Christmas. So, liquidity is going to start drying up.
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