(MENAFN- Daily Forex)

• Strong support at the 23,000 euro level and the 200-day EMA has stabilized the DAX, but the index remains in consolidation.
• Traders are watching the Federal Reserve as a potential catalyst for a move toward 24,500 euros.

The German DAX gapped higher to kick off the trading week on Monday, as it looks like we continue to see a lot of volatility and a lot of choppiness. But what I find most important here is that we have, in fact, bounced from the crucial 23,000 euro level. We have also bounced above the 200-day EMA, pulled back to test that 200-day EMA for support, and have in fact found that support.

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The markets are now paying close attention to the Federal Reserve because people are starting to think that maybe loose monetary policy is coming. And although that doesn't directly influence the DAX, it certainly has an influence on global trade. Germany was the biggest performer in Europe during the trading session, which makes a certain amount of sense considering that's the first place people put money to work, and therefore it's typically the first place you start seeing buyers. Nonetheless, I think we're still very much in a consolidation zone, and therefore, it's difficult to get overly aggressive at this point.

A bounce towards the 24,500 euro level is possible, but I think that's going to take some time.

If we were to turn around and break down below the lows of the Friday session, then that would be a very bad sign. I also anticipate that you would probably see a lot of European indices struggling overall, as Germany tends to lead the rest of them. If this one continues to rally, then you'll see some of the smaller indices on the continent pick up a bit of money as well, as traders will start to try to turbocharge their gains. We are at the bottom of a range, and we have shown signs of stability. That's the first hint that perhaps the buyers are about to step in and start pushing again.

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