Dax Forecast Today - 22/01: DAX Continues To Find Buyers

(MENAFN- Daily Forex)

• The German index continues to see a lot of buyers on dips, in what has been a very bullish run. Initially, during the day on Tuesday, the market had plunged back below the €21,000 level, perhaps in reaction to Donald Trump tweeting out that he was going to put 25% tariffs on Canada and Mexico, bringing a bit of“risk off behavior” into the markets overnight.

That being said, we have turned around since then and it looks like the market is ready to go much higher. We are a little extended at this point, so I don't necessarily think that I would“YOLO into this market”, but I do think that you can only be looking in one direction. If we were to pull back from here, I think there are a couple of different places where I could provide a certain amount of support on any pullback Analysis

This is still a market that is very strong as we are significantly above the 50 Day EMA and now hanging out above the 21,000 level. The 21,000 level of course is an area that a lot of people will be paying close attention to, mainly since it is a large, round, psychologically significant figure, but even if we were to break down below there, I think there is even more support at the €20,500 level. Anything below there gets a little dicey, but at the end of the day we are in an uptrend, so you have to assume that continues over the longer term. Yes, it could be very volatile, but the overall direction remains bullish.

Keep in mind that the European Central Bank continues to be dovish with its attitude, and I think that will be a major factor in the DAX going forward, as well as the other major indices in the European Union. I am bullish with regard to this market.

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