- During my daily analysis of the European indices, the DAX 40 is showing signs of weakness, but it’s probably worth noting that we have been back and forth for a while, and it certainly makes quite a bit of sense that we continue to see a lot of this type of noise.
- Quite frankly, the market pulling back the way it has offers a little bit of value for those thinking longer term, as the DAX is the first place that money flows into when it comes to the European Union.
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Technical Analysis
The technical analysis for the DAX is somewhat lackluster in the short-term, but over the longer term we have most certainly seen a lot of buying pressure that people will continue to pay close attention to. With that being the case, I am paying close attention to the €19,000 level underneath, which has shown itself to be important more than once.
It’s a large, round, psychologically significant figure, and that in and of itself will attract a certain amount of attention anyway. Furthermore, we also have the 50 Day EMA sitting just above there, and that has offered quite a bit of support previously, at least over the last couple of weeks. As long as we can stay above the €19,000 level, then I think this is a situation where traders will continue to see a lot of interest in this market, and if we can build a little bit of momentum to the upside, specifically breaking above the €19,600 level, then we could see the market really start to take off. At that point, I would anticipate that the DAX will go looking to the €20,000 level above.
If we were to break down from here, then I think you would probably see a lot of negativity and various European indices, not just the DAX. After all, the DAX is the biggest index in the European Union, and of course it makes a certain amount of sense that we would see knock on effect in other indices such as Milan, Amsterdam, and so on.
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