- The German DAX has rallied rather significantly during the Friday session to in the week on a positive note.
- At this point, we have seen the DAX fall a couple of times recently, only to turn around and bounce to show signs of life.
The €18,000 level seems to be an area that a lot of people are paying close attention to, as it is not only a large, round, psychologically significant figure, but it’s also an area where we have seen a lot of noise. That being said, the DAX market used that area as support, and it looks like we are going to try to break out to the upside.
Ultimately, the German index is probably going to get a bit of support due to the idea that the European Central Bank is certainly going to cut interest rates soon, so people are starting to jump into the DAX in order to take advantage of this liquidity. Ultimately, if there is going to be a lot of “easy money” in the European Union, Germany will be one of the first places that we see it thrown at.
Buying On the Dips
Buying on the dips will continue to be the way forward, and I think that we have seen that play itself out over the last 2 weeks. If we can break above the €18,325 level, then I think it’s very likely that this market goes looking to the €18,600 level. In general, this is a scenario where I think you continue to see a lot of volatility, but I do think ultimately you see a lot of buyers coming into this market, more than anything else. If we do break down from here, then you have to pay close attention to the 50-Day EMA, where we had bounce from during the previous session on Thursday.
I do not think we are likely to have an easy route higher, but I clearly see that the sellers are struggling. As long as the market continues to see a lot of liquidity being pumped into the EU, it’s almost impossible to imagine a scenario where we break down.
Potential Signal
The DAX looks very positive at this point, and I am a buyer at the previously mentioned €18,325 level. I would have a stop loss just below the €18,000 level and aim for the €18,600 level above.
Ready to trade our DAX prediction? Here’s a list of some of the best CFD trading brokers to check out.