(MENAFN- Daily Forex)
The dax has been relatively quiet during the trading session on Tuesday, as we continue to hang right around the €14,500 level. We have been grading slowly higher, perhaps trying to build enough pressure to eventually break out. Volume is starting to drop a bit, so one has to think that more or less what we are seeing is a market that is taking a breather. While not a US market, the lack of liquidity on Thanksgiving will almost certainly have at least somewhat of a knock-on effect as major New York firms will be pumping money into the markets.
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The €14,800 level above is significant resistance, where we had fallen from previously. We are a little extended at this point, so do not be overly excited about trying to jump in with both feet. The market looks as if it's forming a little bit of an ascending triangle, but you need some type of momentum to make that come true. Even if it does break the top of this triangle, at that point we are still looking at €14,800 as a potential target.Look to Short Smaller Markets
On the other hand, if we were to turn around and break down from here, we could pull back to the €14,200 level for support , possibly even the €14,000 level. Anything below it opens the possibility of retesting the 200-Day ema , but right now it looks as if the market is in a bullish mode. Whether or not that lasts is a completely different question, because quite frankly the European economy is not something to get overly excited about right now. Remember, the DAX is the leader for the rest of the European Union, so if this market starts to fall, you may do better shorting other markets such as the MIB, IBEX, or AMX. Smaller markets tend to get hammered when the DAX starts to fall.
On the other hand, if money is going to start flowing back into the European Union, this is the first place it'll happen. With that, breaking above the €14,800 level opens the possibility of €15,000 above, and then perhaps even a bigger move than that. For what it is worth, the 50-Day EMA is trying desperately to catch up with the 200-Day EMA below the €13,600 level.
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