(MENAFN- Daily Forex)

• The German index rallied slightly during the trading session on Wednesday, after initially gapping lower.
• Because of this, the market looks as if it is still trying to break out to the upside but does not have enough momentum to do so.
• I still believe that the DAX will be a bullish market before it's all said and done, but I don't think that this is the time of year where we will see explosive moves without some type of external announcement.

EUR/USD Trade Deal

There are some concerns about the trade deal between the Americans and the Europeans, and quite frankly some people just do not like the way it turned out. This could be part of what is weighing on the DAX overall, but I also recognize that we have a situation where traders are also on vacation for the most part, so the volume does drop this time of year. With that, you cannot read too much into the market other than it is simply“stuck” near the highs.

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On any type of pullback from this level, I'd be watching the 50 Day EMA, because quite frankly it might end up being important support. I do not wish to short the DAX, and even if we broke down below the 50 Day EMA, I anticipate that there should be enough support at the €23,000 level to have buyers interested in getting long yet again. On the other hand, if we can break above the €24,600 level, then I think we will kick off the next leg higher, perhaps letting the market reach the crucial €25,000 level, followed by the“measured move of €1600, putting this market at the €26,200 level based on the recent consolidation. Regardless, the one thing that I don't have any interest in doing when it comes to the DAX is trying to bet on it falling. Quite frankly, if I decide to short European indices, it will be against smaller indices such as the IBEX in Spain.

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