The German index rallied a bit in the early hours of Monday trading, as we are looking to continue to the uptrend. However, this is a market that continues to face problems with rallies.
DAX
The German index tried to rally to kick off the trading session on Monday but started falling again as it looks like we are continuing to look at the 25,000-euro level as a potential target for price and a fulcrum or magnet if you will. The market has been very bullish for some time but recently we have seen a lot of choppiness and that choppiness I think continues going forward.
With this being the case market participants continue to see this as a market that I think you buy dips in with the 50-day EMA underneath offering support right along with the 25,000-euro level, which has a lot of psychological importance to say the least at this point, and will more likely be so going forward.
Support and Resistance Targets
To the upside the 25,500-euro level could be your target, but I also recognize that we will probably go even higher than that over the longer term. Keep in mind that the European Central Bank has pretty flat monetary policy stance at this point, but we also have questions about tariffs and the like around the world, so I think this continues to be noisy but positive.
I have got no interest in shorting the DAX and I do think that the 24,500-euro region is a major floor. Longer term I would look for this market to go looking to the 27,000-euro level but it is going to take quite a bit of time to get there. I think it is more of a slow grind buy on the dips type of scenario in Germany.