Dax Forecast Today 25/03: Rolled Over On Monday (Chart)

(MENAFN- Daily Forex)

• The German index initially rally during the trading session on Monday, breaking well above the €23,000 level.
• However, the market could not hang on to the gains very long, and we have since seen the DAX rollover quite drastically.
• This is interesting, considering we had formed such a significant hammer during the previous trading session, and we are bouncing around that psychologically significant level.

At this point, if we were to break down below the lows of Friday, it could send the text looking to the €22,500 level, possibly even the 50 Day EMA underneath there. The €22,000 level is the bottom of the overall“playing field” at the moment, and anything below that level then means that all bets will be off, and we probably continue to pull back drastically at that point. That being said, this is a market that given enough time should continue to go higher, but short-term volatility is something that I think you will have to get used to in not only the text, but most markets overall at the moment.

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There are a lot of concerns about global trade at the moment, and it is worth noting the Germany is a major exporter of goods to various parts around the world. Because of this, it's a bit of a moving picture, but it is also worth noting that the German economy is exiting a recession. That's a good sign, and it should lead to more profitability. However, there are other things to pay close attention to at the moment.

There is little doubt that the United States is looking at putting tariffs on the European Union at the moment. If they do, that could be rather disrupting to indices across the continent, and of course you also have to keep in mind that interest rates in Germany have been rising, and at one point or another, that will become a problem. We are not necessarily anywhere near that at the moment, but it is something to keep in the back of your mind.

As things stand right now, I believe that the DAX continues to be bullish over the longer term, so short-term pullbacks continue to be buying opportunities. I don't have any interest in shorting this market until we get well below the €22,000 level, and even then, I would have to take a look at the overall fundamental situation before we make any serious decisions.

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