The German index fell apart during the trading session on Wednesday, slicing down towards the €13,000 level underneath. That is an area that the buyers have been very active in, so I think that the bounce that we are starting to see later in the day makes sense. I look at this is a value proposition, and I believe it’s only a matter of time before we go much higher. Because of this, I am willing to buy this market, and reach towards the €13,300 level. If we can break above there, the market then goes to the €15,000 level over the longer term, but it’s going to be very noisy on the way out there.
If we did breakdown below the €12,900 level, that would be a negative sign and could send this market much lower. I believe that there is plenty of support underneath though, and of course with the longer-term uptrend, it makes sense that this should offer value to longer-term traders. Longer-term traders favor the DAX when it comes to the EU anyway, as it is the largest index in the continent, and of course Germany has by far the largest economy. As Germany goes, so does the rest of the European Union.
If we were to break down, I think that there is a “floor” in the overall uptrend at the €12,000 level, so if we break down, we could drop significantly. At that point, I would be looking for a longer-term support signal, perhaps off of the weekly charts.
DAX Video 21.12.17
This article was originally posted on FX Empire