- The DAX in Germany took off to the upside during the trading session on Thursday as we have now broken above the crucial €18,500 level.
- By doing so, we have made a fresh, all-time high in this market, which makes quite a bit of sense as people expect the European Central Bank to start cutting rates.
- Ultimately, this is a market that’s been very bullish for a while and of course leads the way for the rest of Europe.
If you had been following me here at Daily Forex, you know that I’ve been very bullish of the DAX, and I think that continues to be the play here. Given enough time it’s very likely that we go looking to the €20,000 level, but that doesn’t mean we get there overnight. At this point, we are a little stretched and I think of short-term pullback could be coming soon. With this being the case, I like the €18,250 level is a nice support level that you can take advantage of, but quite frankly I don’t even think we get that far to the downside. I would also be interested in the €18,500 level if I get that opportunity.
Regardless, what it comes down to is that you cannot short this market, due to the fact that it is far too strong and therefore I think you get a situation where value hunters are almost certainly going to come into the market every time, they get an opportunity.
The Trend Will Continue
The trend has been extraordinarily bullish, and the 50-Day EMA is now reaching the €18,000 level. I think this continues to look very bullish, and it continues to be a situation where you are buying every dip you get the opportunity to. The European indices are going to be strong in general, and the DAX will be the first-place people put money to work as it is considered to be the “bellwether of the continent.” Keep in mind that the German index is highly laden with export companies, and therefore a relatively weak euro is a huge tailwind for this market.
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