- The German DAX has rallied again during trading on Thursday as we continue to see a lot of support.
- At this point, it looks like we are trying to break above the shooting star from Tuesday.
- If and when we do, that does show technical strength.
I think this is a market that continues to reach towards the 18,500 level, which is an area that of course is very important. If we can break above there, then it's likely we could go looking to the 18,750 euro level, followed by the 19,000 euro level. Short-term pullbacks continue to be buying opportunities as we have seen over the last several sessions. At this juncture, the 18,000 level underneath is going to continue to be a hard floor in this market.
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We Are Above the 50-Day EMA
Now that we're back above the 50 day EMA, some traders will look at that as a reason to get long yet again. Keep in mind that the DAX is without a doubt the leader when it comes to the European Union and stock markets. And I think it will continue to lead the rest of the indices higher. So pay attention to this one, even if you aren't trading Germany directly, it could help with France or Italy or Switzerland, Holland, et cetera.
I have no interest in shorting this market, but if we broke down below the 18,000 euro level, that would be a very negative turn of events. At that juncture, we could see the market try to get down to the 200 day EMA, but that doesn't look very likely. I like the idea of buying dips, as I said, and I do think that longer term, we will reach the highs again near the 19,000 euro level. This is an area that we are going to be aiming for over the longer-term. I think it is only a matter of time at this point.
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