- The German index initially did try to rally during the trading session on Wednesday, but by breaking above the 50 day EMA, it ran into a lot of resistance.
- Ultimately, this is a market that is doing everything it can to consolidate near the 19,000 euro level, perhaps more specifically the 18,950 euro level.
- In general, this is a situation where we have plenty of buyers waiting to get involved and start pushing this market to the upside, perhaps as high as 19,650 euro.
The 50 day EMA is going to continue to cause some noise in the market as we continue to see that as something that has had some influence. If we were to break down below the hammer from the two candlesticks of the previous days of the week, then it's possible that we could go looking to the 18,400 euro level.
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DAX is Greater Than its Contemporaries in the EU
I do believe that the DAX will continue to outperform most of Europe. But that is a relative statement. That's not necessarily a statement that the DAX is ready to rip to the upside. That being said, we are in an uptrend. I will continue to look at this market through that prism. So I don't necessarily want to get short of the DAX. I'm just looking for some type of momentum to get excited about owning this index again.
There are a lot of concerns in the European Union based on economic numbers, but we also have escalation in Ukraine and that's fairly close to Germany, at least for traders in places like North America and Asia. So that takes some of the foreign money out of this market. At least that's what I would expect. At this point, I do think you're looking for some type of momentum to get involved to the upside, but I don't think that it's quite time to start selling the DAX either.
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