The German index gapped higher at the open on Monday, breaking above the €13,000 level, but pulled back to find buyers yet again as the 24-hour EMA has offered a bit of dynamic support. I think the given enough time, and the fact that the pullback produced a massive green candle on the hourly chart suggests that we are going to go to the €13,200 level after that. A break above that level, which is the top of the recent short-term consolidation, sends this market towards the €13,500 level longer term. That’s an area that should continue to attract a lot of attention, so quite frankly I think that the market breaking above that level is a longer-term “buy-and-hold” signal. We could get the potential “Santa Claus rally” that we get it on Wall Street every year, but I believe that the market will probably follow in Germany if the United States rallies.
If we pull back from here, the €12,800 level underneath should be the bottom of consolidation that keeps this market alive, and rallying. However, if we were to break down below that level, we could reach towards the €12,500 level underneath. That area is even more supportive than anything else, and given enough time I think that the buyers would return when that happens. Either way, I don’t have much interest in selling the DAX, I believe that the longer-term attitude of this market is bullish, and I don’t see much standing in the way, even if the EUR has been appreciating over the last several months. In fact, that’s about the only hurdle that I see currently.
DAX Video 05.12.17
This article was originally posted on FX Empire