DAX Price forecast for the week of December 11, 2017, Technical Analysis

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German index participants initially sold off during the week, but found reasons enough to go long as we get closer to Friday. · FX Empire

Christopher Lewis

Updated Fri, Dec 8, 2017, 11:48 PM

The German index initially fell during the week, breaking down towards the €12,900 level, but bounced enough to break cleanly above the €13,000 level, and post the highest close that the market has seen over the last month. A break above the top of the weekly candle should send this market towards the €13,500 level, which was the most recent high. We are most certainly in an uptrend, and I think therefore pullbacks continue to offer value the traders are willing to take advantage of when it comes to the DAX Index. I believe that the market breaking above the €13,500 level would be a sign that we are going to go much higher, essentially making it a “buy-and-hold” scenario. It’s not until we break down below the €12,500 level that I would be concerned, and I believe that the bottom of the uptrend is closer to the €12,000 level. This has been a very good year for the DAX, and I think we will continue to see more of the same as although the ECB is looking to cut back on quantitative easing, it’s more out of a place of strength than concerned.

Longer-term, I believe that the market will be looking towards the €15,000 level, but that’s obviously a story for later in 2018. I base my trading based upon that thesis, and until we see some type a significant breakdown, I believe that’s what most longer-term traders are starting to pay attention to as the €15,000 level is a large, round, psychologically significant number. It will be volatile, but certainly looks as if it will be positive.