(MENAFN- Daily Forex) Potential signal:

• I am a buyer of the DAX anywhere near 23,000 with a stop at the 22,500 level.
• I would aim for a return of bullish pressure, targeting 24,000.

The DAX continues to trade within a tightly defined multi-month range, with price now pressing toward the 50-day EMA. Traders are watching for either a bounce that supports short-term opportunities or a decisive breakout from the long-held boundaries.

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On Tuesday, we saw the DAX rally a little over one-half percent as we are now approaching the 50-day EMA. The 50-day EMA, of course, will be an indicator that a lot of traders watch. But more importantly, the 50-day EMA is sitting right in the middle of a larger consolidation area between the 23,000 euro level on the bottom and the 24,500 euro level on the top. The fact that we are sitting right in the middle of this range looks like a potential struggle just waiting to happen. That being said, if we do in fact pull back from here and bounce, I think that offers a nice opportunity for short-term trade Range Dynamics

Whether or not we can break above the crucial 24,500 euro level anytime soon remains to be seen, as the market has been bouncing around in the same range for about six months. However, it is worth noting that if money is in fact going to go flying into the European Union, it generally starts in Germany. Conversely, if this market were to break down below the 22,800 euro level, I think at that point in time, the DAX falls pretty significantly, perhaps down to 21,300 euros.

On the upside, if we clear the 24,500 euro level, the first thing that we'll be paying attention to will be the 25,000 euro level. Anything above there could get this market really shooting straight up in the air, but right now, it doesn't look like it's got the momentum to break out. So, I suspect most traders will just simply play this well-defined range.

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