The interest rates in Germany continue to play a part in how the Dax moves, as dropping rates have lifted the DAX over the last few sessions. Watch energy, it’s a key as well.
DAX
Rallied again during the trading session on Tuesday as energy prices are coming down. This makes a certain amount of sense considering that Germany is especially susceptible to energy shortages coming out of the Middle East, and the situation in the Middle East of course continues to be very fluid. Traders currently are pricing in the idea in the oil markets that maybe peace could be coming eventually.
That being said, this is also a very tenuous situation, and if energy looks to be threatened for the German industrial base, that could have major implications on how the DAX behaves. After all, it is Europe's biggest market, but it is also Europe's strongest exporter, and with that being the case, it obviously has a certain amount of influence on what happens next, not only in the DAX, but the European economy and the currency itself.
Navigating Energy Risk and Technical Targets
We are a little extended at the moment, but I anticipate that any short-term pullback will more likely than not end up being a buying opportunity, and in this environment, I think you have to believe that traders will continue to look at this as a market that will offer value occasionally.
Top Regulated Brokers
The breaking of the recent swing high opens up the possibility of continuing much higher, possibly even as high as 30,000 euros before it's all said and done, but that would be a longer-term projection. Interest rates in Germany have been dropping for about a week, and the DAX has responded quite nicely. Whether or not that correlation continues remains to be seen, but this is most certainly a bullish market.
Ready to trade our stock market forecast and analysis? Here are the best CFD stocks brokers to choose from.