The German index went sideways on Friday and then fell to the €12,570 level, but found buyers to turn the market right back around. The market looks likely to continue to grind to the upside, even though the EUR/USD pair rallied a bit. This was due to less than expected economic numbers coming out of the United States, which puts a bit of a question into the mind of traders as to whether the Federal Reserve can continue to raise rates. Ultimately, I think the Federal Reserve will continue to do what it says, but it might be at a slow pace. If the EUR/USD pair remains below the 1.15 level, I think that the market will continue to have bullish pressure. I think the buying dips will be the way going forward, and that the €12,500 level should now act as a bit of a floor in a market that has clearly broken out.
Buying dips
I’m buying dips in this market, but I recognize that the volatility might be relatively strong. I think the given enough time we should continue to go to the €13,000 level, which of course is a large, round, psychologically significant number. That being the case, I think that the market will continue to be volatile, but I still believe in the upward trend of this market overall. I think that the DAX will continue to lead the rest of the European Union higher, and therefore you can trade other indices around the EU based upon what the DAX is doing as well. Given enough time, I think the buyers will return looking for value in a market every time we drop.
This article was originally posted on FX Empire