DAX Forecast Today - 09/07: Early Gains Lost (Chart)
(MENAFN- Daily Forex)
It's becoming increasingly obvious that the €18,650 level is a bit of a barrier. It's worth noting that we had sold off quite drastically from there, just a couple of weeks ago. With that being the case, the market is likely to continue to see a lot of noisy behavior, but at this point in time I do think that it's probably only a matter of time before we break out to the upside.
Technical Analysis
Keep in mind that the DAX index has been bullish for quite some time, and therefore you need to be cognizant of the fact that each pullback should be thought of as a bit of an anomaly, not necessarily shown itself to be a market that can just jump in and start throwing huge positions around. After all, we have seen the occasional stumble, just as we have seen the market do exactly that over the last 48 hours or so of trading.
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Underneath, we have the 50-Day EMA offering support near the €18,350 level, an area that previously has been resistance, and it should now be supported. With this being the case, value hunters will almost certainly be attracted to this market, but you have to be willing to jump in and take advantage of any cheap contracts that appear. Keep in mind that Germany of course is the main driver of the European Union, and as long as that's going to be the case, I think you have to assume that value hunters will be the main driver.
Underneath, we have the €18,000 level as a major port level, which of course is a large, round, psychologically significant figure as well, and with that being the case I think you've got to be aware of the fact that any move below there could be a big deal. Until then, I think you have to look at this as a market that you can only get long of, and if we can break above the crucial €18,650 level, it really should start to pick up momentum.
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