DAX Forecast: Index Continues to Hang On to €15,000

Christopher Lewis

In general, this is a market that is trying to find its footing, but it may take a couple of days before we get an impulsive candlestick that we can follow in one direction or the other. 

The DAX gapped lower to kick off the Monday session, only to go back and forth to show signs of confusion. The candlestick is rather neutral, as we are sitting above the 15,000 level. That is a large, round, psychologically significant figure that will attract a certain amount of attention. Furthermore, we also have the 200-day EMA sitting just below there as well, so that in and of itself will have traders looking for a potential entry.

If we were to break down through there and go looking towards the bottom of the candlestick that made up last week's low, then I think you could be looking at a move to the downside, perhaps reaching towards the 14,500 level. After that, you have the market looking towards the €14,000 level, but I think we have a long way to go before we finally break down through all of those levels. The candlestick range itself for the Monday session is not that big, so I think this shows that we are simply trying to build up enough momentum to put a floor in the market. If we can break above the highs of last week, then I think it is likely that we will go looking towards the 50-day EMA above, which currently is at the €15,478.9 region.

Breaking above that 50-day EMA, it is possible that we could go looking towards the €16,000 level, perhaps even higher than that over the longer term. After all, we have been in an uptrend for quite some time, but we also have to worry about the COVID numbers in the European Union increasing, and that could be a bit of a negative when it comes to stocks overall, but the DAX is also a market that has a lot to do with international trade and the reopening situation around the world as large industrial companies in Germany supply so much of the world’s industrial materials. In general, this is a market that is trying to find its footing, but it may take a couple of days before we get an impulsive candlestick that we can follow in one direction or the other. As soon as we get that, then I am more than willing to get involved in playing this market.

DAX Index

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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