(MENAFN- Daily Forex)

• DAX suffered its worst performance since September, gapping lower toward the 200-day EMA and key 23,000 support.
• While the decline was sharp, the broader trend remains sideways, and upcoming sessions will determine whether a rebound develops.

The DAX gapped lower to kick off the Tuesday session in what has been the worst day that the German index has had since September. As things stand at the end of the trading session, we are sitting right on the 200-day EMA and, perhaps more importantly, a significant support level in the form of 23,000 euros. This big gap that kicked off the session is probably filled, but we need some type of risk appetite to come back into the market to turn things higher.

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The 23,500 euro level could be a slight barrier due to the gap. But if the market can break above there, then it will almost certainly try to get to the 50-day EMA. I do think that you will see a lot of choppy sideways behavior at the moment. But that's okay, because quite frankly, that's what this market has been doing since the middle of April.

If we were to break down below the 23,000 euro level on a daily close, that would be a negative sign. That could send this market down to the 22,500 level. But I think you have to understand it probably takes a little bit of effort to make that happen. I suspect value hunters are willing to come in as although the day was pretty bad for the DAX, at the end of the day it was only a loss of 1.74%. So, while it is the worst loss since September, it wasn't a complete wipeout.

Technically speaking, this looks like a sideways market. So, the Wednesday session will end up being pretty important, as will the Thursday session, to determine whether or not we will try to bounce again.

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