The German index has been slightly bullish on Thursday, as traders are doing what they can to push it above the 26,000 level and recover some of the losses from earlier in the week.
DAX
The German index rallied a bit during the trading session on Thursday as it looks like we are defending the 50-day EMA. The 50-day EMA has acted like a trend line since April, and that is a little bit of technical analysis and perhaps market memory coming into play.
The €26,000 level is an area that previously had been support and now could offer a bit of resistance. If we can break above there, then it could bring in more fresh buying. The question now, of course, is going to be about the jobs number in the United States on Friday, because that has a major influence on what happens next with monetary policy pretty much around the world. This could be the story for a few days, but this will come down to whether it comes in as expected or way off the mark.
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Macro Headwinds and Fiscal Support
The Germans might be a little bit hesitant to get overexposed at this point, and of course they have to worry about the potential for energy to be disrupted to the EU. The German industrial base is a huge portion of the DAX, and therefore, I think that is a little bit of a problem.
But you can also make an argument that the fiscal policy of the German government loosening and, of course, doing more infrastructure and military spending helps the DAX. I do think that the uptrend will eventually continue, and I do like the DAX in general. I just recognize that we've had a couple of really tough days previously this week, and now the climb higher, as per usual, could end up being a little bit slow.
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