The German DAX has rallied a bit in the early session on Tuesday, as traders are reacting to potential good news coming out of Iran. Furthermore, it is end of quarter trading.
German DAX
The German DAX has been pretty bullish during the trading session on Tuesday and now we are starting to see reports that perhaps the Iranians are looking to end the war if they get a certain amount of guarantees coming out of the Americans and the Israelis. If that is in fact the case, we could see a major risk appetite boost for markets around the world, not just this one.
That being said, it is worth noting that the market has struggled with the 23,000-euro level multiple times. I think the fact that we are pulling back from there a little bit suggests that maybe there isn't complete trust in these types of headlines. After all, we've been burned multiple times as of late and I think that will continue to be the case, or at least what people fear.
Geopolitical Headlines and Technical Resistance
If we finally get an end to the war that changes a lot, but as things stand right now a lot of traders are paying close attention to this because they are worried about energy and a lack of energy coming into the European Union. If that in fact continues to be an issue that causes major problems for the DAX, I think right now we are in a state of flux, and it will be interesting to see whether or not we can continue to see buyers here.
If we do and we can clear the 23,250 level, then I think you have a situation where we could see a little bit of follow-through. Otherwise, we are still very much in a range and unfortunately, we are sitting here watching the headlines to see whether or not things are settling down in the Persian Gulf.
Potential signal: I am buying DAX above 23,500 with a stop at 23,000. The target is 25,350.