(MENAFN- Daily Forex)
The German index fell initially during the trading session on Friday, only to turn around and show signs of life. By doing so, it looks like we are trying to form some type of hammer, and that of course is a bullish sign, especially considering that it's a pullback in a longer term uptrend.
The 18,000 level underneath will be massive support, but we are 250 euros above there at the moment, and it looks like we are ready to go higher again. I certainly don't want to fight the trend , and at this point in time, I'm just looking for opportunities to get long again. If we do break to the upside, then the 18,600 euros level will almost certainly be tested and attempted to be broken over. If we break down below the bottom of the hammer for the trading session on Friday,
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I think it's probably only a matter of time before you sit back and wait for another opportunity to start buying again . I see that near the 38.2% Fibonacci retracement level, ostensibly at the 17,750 euro level. Either way I have no interest in shorting this market due to the fact that we have so much in the way of momentum and of course the fact that the recession in Germany will almost certainly have.
The ECB is at least contemplating the idea of loosening monetary policy. In fact, I think banks around the world are expected to do that. And therefore, it should stoke economic growth and of course, money flowing into riskier assets, such as stocks in Germany. You should also keep in mind that the DAX is considered to be the bellwether for the European union. So, placing a bet in Germany is essentially placing a bet on the EU, as it is the first place where we see money flowing into the EU area. However, I do expect a bit of volatility in this market, right along with the other markets we follow. Volatility seems to be a feature of the financial markets, but a bug.
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