- The German index held steady during a volatile Wednesday session, maintaining its broader consolidation pattern.
- Despite intraday fluctuations, the DAX continues to attract dip buyers, supported by key technical levels that reinforce its longer-term upward bias.
During the trading session on Wednesday, we saw a lot of volatility in many markets, but one relatively stable market, at least relatively speaking, is the German index. The DAX has shown itself to be resilient, and it ended up trading basically unchanged, although there was a short-term dip in the early part of the session.
Top Forex Brokers
All things being equal, this is a market that I think remains very range bound. And I anticipate that we have a situation where traders will be looking at dips as potential buying opportunities, as we have been consolidating after a major move to the upside over the last several months, and then followed by a few more months of consolidation.
Key Support Levels
With that being the case, I think it's probably only a matter of time before we go higher as stock markets around the world continue to strengthen. And of course, the DAX is the first place that money flows to when coming to the European Union. At the 23,866 euro level, we have the 50-day EMA, which would offer a little bit of support. But even if we were to break down below there, I think we have a bit of a floor in the market at the 23,000 euro level because it has proven itself a couple of times in the past. And of course, we have the 200-day EMA above there.
Simply put, this is a market that I think you buy on dips, and you recognize that the upside is probably somewhat limited at the moment. But I do think eventually the DAX takes off and goes looking at the 25,000 euro level. But that may take some time to happen. Ultimately, I have no interest in shorting this market, and I do think that it will prove itself viable eventually.
Ready to trade our stock market forecast and analysis? Here are the best CFD stocks brokers to choose from.