Dax Forecast Today 09/06: Holds Firm (Chart)

(MENAFN- Daily Forex)

• The German index was fairly quiet during the trading session on Friday, as the market waited for the Non-Foreign Payroll announcement in the United States.
• This obviously has a major influence on risk appetite, and not to mention the fact that it has a major influence on the currency markets, which of course has a major influence on indices.
• After all, none of these markets operate in a vacuum, so one should not expect the DAX to be any different.
• Ultimately, DAX has been overbought for some time, so the fact that we are stretching out makes a certain amount of sense.

Technical Analysis

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The technical analysis for this market is obviously very bullish, but I also think that the market is a little overstretched at this point. The €23,600 level is an area that should offer a significant amount of support, especially with the 50 Day EMA racing toward it. This should offer even more support, as a lot of technical traders will pay close attention to it. As it converges on that region, I think it only solidifies what people will be looking at, not only due to the fact that just a couple of weeks ago we seen a lot of support there, but we had seen resistance there previously as well. In other words, there is a significant amount of“market memory” in that neighborhood.

On the upside, if we were to break above the €24,500 level, then the market could go much higher, perhaps reaching the €25,000 level. The €25,000 level of course is a large, round, psychologically significant figure, and an area that a lot of people would be watching closely. Because of this, I am looking at pullbacks in the text as a potential buying opportunity to join a longer term uptrend that has been intact quite nicely over the last several weeks. A little bit of sideways action makes a certain amount of sense, because at that point, you could entice new buyers.

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