DAX 30 Forecast Today - 08/07: DAX Gives Up Gains (Chart)
(MENAFN- Daily Forex)
The first thing that stands out to me is that although we had seen a lot of bullish pressure early during the trading session in the German index, we gave up all of the gains to show signs of exhaustion It now looks as if we are going to continue to see a lot of volatility, and a lot of pushback on any type of bigger move to the upside.
Technical Analysis
The German DAX of course has been bullish for a long time, but it's worth noting that the Friday candlestick was a massive shooting star, and that of course is a very negative turn of events. On the other hand, if we can break above that shooting star, it would be very bullish sign. At that point in time, the market could go looking to the €19,000 level, which is essentially the ceiling that we had been testing in the past. All things being equal, the market is likely to continue to see a lot of“buy on the dips” action, and it's also worth noting that the €18,000 level underneath is a massive support level. In fact, we have already seen that area offer quite a bit of buying pressure.
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If we were to break down below the €18,000 level, then it's likely that we could go looking at the 200-Day EMA. The 200-Day EMA is a significant indicator for the longer term trader, and therefore I think you get a situation where buyers would be more than willing to try to defend this area.
I believe that in the short term we are likely going to continue to be very noisy, but I do think that over the longer term we will more likely than not continue to see a lot of value hunters coming into pick up the market, as the overall attitude is very bullish. Furthermore, you also have to keep in mind that the European Central Bank has shown itself to be dovish, so that could give you a potential move to the upside just waiting to happen at this point in time.
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