DAX Index forecast for the week of February 26, 2018, Technical Analysis

The German index initially fell during the week but turned around to find enough support to bounce and form a nice-looking hammer. The hammer of course is a bullish sign, and a break above the top of the hammer is a buy signal. The €12,750 level above should be resistive, and I think that given enough time we are likely to see the market try to break above there. If we do, then I think the next target will be the €13,000 level. Even if we do break down below the bottom of this hammer, I think that there is plenty of support near the uptrend line and more importantly, the €12,000 level to keep this market going higher.

It’s not until we break down below the €12,000 level that I would be looking to short this market, and at that point I think we would probably drop towards the €11,000 level rather quickly. The DAX has been very bullish overall, and I don’t think that’s going to change anytime soon as it is the benchmark for the European Union, so I remain optimistic and am willing to put money to work. My longer-term target for the DAX has been €15,000 for some time, and that has not changed.

I think that this will eventually be a “buy on the dips” situation, and I believe that most traders look at it the same way. The DAX will lead the rest of the EU indices, as well as perhaps give us a bit of a “heads up” as to what happens in America.

DAX Video 26.02.18

This article was originally posted on FX Empire

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