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The German index fell significantly during the trading session on Wednesday, dropping down towards the €11,800 level, an area that has been supportive in the past. The market continues to see a lot of support in that area, and the bounce on Wednesday would have been rather encouraging. The €12,000 level looks to be offering a bit of resistance though, so I think we may churn in this general consolidation area, at least until we get some type of clarity from the jobs number in America. While that doesn’t relate to the DAX specifically, it gives you an idea as to where risk appetite will go looking for money. The attitude of DAX traders should continue to be bullish overall, but if we were to break down to a fresh, new low, the market should unwind rather rapidly, perhaps going down to the €11,000 level.
I believe that the market does seem to have a certain amount of support underneath that should be acknowledged, so if we can get some type of bullish momentum going, the DAX should be one of the major beneficiaries. I also believe that the attitude of this market will be skittish, as we have a potential trade war on our hands. Headlines coming out of China in the United States could cause a bit of trouble, but if we can get some type of resolution to that situation, and perhaps a good jobs number on Friday, that could be a recipe for much higher levels.
DAX Video 05.04.18
This article was originally posted on FX Empire