[ad_1]
True, we are at historically cheap levels, but that doesn’t mean we cannot go any lower.
The German DAX Index rallied a bit Friday as we continue to pay close attention to the €12,500 level. That’s an area that should be paid close attention to, as it is a large, round, psychologically significant figure, but it is also an area where we have seen buyers at previously. Because of this, I think it is only a matter of time before value hunters come into the market near that level.
If we do break it down below it, it’s likely that we will go reach the €12,000 level, based upon previous historical action, and the fact that it is a large, round, psychologically significant figure. In general, I think this is a market that will continue to see a lot of volatility, especially as the German economy continues to slump due to a lack of energy. It’s possible that the expense of energy may cause a complete disruption.
The €13,000 level is a large, round, psychologically significant figure, and an area that I think a lot of people will pay attention to. After that, it’s likely that we could go looking to the 50-day EMA which sits just below the €13,500 region. The market has been in a downtrend for a while, but I think that given enough time we should see selling opportunities.
Keep in mind that the DAX is highly sensitive to the global economy, due to the fact that the majority of the index is made up of massive exporters, and a cheap euro certainly helps the argument. However, as long as production costs continue to soar, there’s no argument for this market to have a major sustainable balance. That being said, if we do break above the €13,500 level, I probably will have to ignore everything and just follow the price.
The size of the candlestick is somewhat interesting, but it still falls within the range that we have seen over the last couple of weeks. The choppy behavior will continue to be a mainstay of not only the DAX, but plenty of other markets as well. After all, the market should continue to see a lot of concerns in both directions. True, we are at historically cheap levels, but that doesn’t mean we cannot go any lower. After all, the global economy is tenuous at best.
Ready to trade our DAX analysis? Here are the best CFD brokers to choose from.
[ad_2]