DAX Forecast Today - 02/07: Continues To Fight (Chart)
(MENAFN- Daily Forex)
I see that the DAX is doing everything it can to break out to the upside. However, I do think that the next couple of days will end up being rather noisy, and therefore very choppy. Short-term pullbacks continue to attract buyers based on the idea of“value.”
Monday Shows Indecision
The German DAX has rallied a bit during the early hours on Monday, but it continues to see a lot of resistance near the €18,375 level. If we can break above that area, then the market could very well go looking to the €18,600 level. This level of course is an area that a lot of people have been paying attention to, as we had sold off quite drastically just a couple of weeks ago. With that in mind, one would have to assume that there is a certain amount of“market memory” at that level.
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It's probably worth noting that we are hanging around the 50-Day EMA, which of course is an indicator that a lot of people will be paying attention to. After all, the 50-Day EMA is a major indicator when it comes to technical analysis on the daily chart, and therefore I think you've got a situation where a lot of systematic traders or to simply involve because of this. On the other hand, we did give back quite a bit of the gains in the early part of the session, so I think that causes a certain amount of trouble.
If we do pull back significantly from here, the €18,000 level is a major support level that a lot of people have been paying attention to in the past, and therefore it's likely that we continue to see a lot of support there, and of course interest in getting involved based upon the idea of“value.” All things being equal, this is a market that I think given enough time, the buyers jump back in based on the idea of loose monetary policy coming out of the ECB, and perhaps the fact that the political winds shifting in the European Union art necessarily the death knell of the European Union itself.
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