The German index was a bit negative during the week, but quite frankly we are consolidating. I think there is a certain amount of support below at the €12,800 level, which is the bottom of the tight range. I think pullbacks represent the value that we will be taken advantage of, to build up enough momentum to break above the €13,500 level. Once we break above there, the market should then go looking towards higher levels such as the €15,000 handle. This is a market that has been very bullish for quite some time, and of course represents the European Union in general via the stock market. The German economy represents over 80% of the output, so it makes sense.
It is not until we break down below the €12,750 level that I would consider selling, and even then, I would be a bit cautious to do so. Longer-term, I believe that the DAX will chase the €15,000 handle, and perhaps beyond. I would anticipate a massive amount of resistance there, but this will be the target over the next several months, perhaps some time during the summer.
The volatility probably favors daily charts, if not the 4-hour chart. This market continues to see plenty of buyers when value presents itself, as it is the best way to invest in European expansion. Beyond that, if you trade other indices pay attention to the DAX as it tends to lead the MIB, Ibex, CAC, and other markets around the European Union.
DAX Video 15.01.18
This article was originally posted on FX Empire
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