The German DAX continues to show a tight and well-defined range, as we are looking at a market that is still trying to determine its next move going forward.
The DAX continues to trade in a range, although it has been pretty ugly here on Wednesday as we test the bottom of that range heading into the evening in Europe. Ultimately, this is a market that has been bouncing around between the 50-day EMA on top and the 200-day EMA on the bottom.
25K EUR matters to me as support
The 25,000 euro level, for me, is more likely than not going to be a bit of a floor. Ultimately, when I look at this market, the first thing I look at is interest rates. They are rolling over a little bit, so that is working against the recent narrative that we had. But I think when you look at this, it is easy to see that range-bound traders might be interested.
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The €25,000 level, for me, is more likely than not going to be a bit of a floor. With that being the case, if we were to break down below there, then you have got a situation where we may have a little bit of unraveling.
I am looking for some type of bounce from here in order to take advantage of the sideways action. But if we can break above the 50-day EMA, then it opens up the possibility of a move to the €26,000 level.
I think we are just kind of sitting on a balance right here. With that, I think you have to understand that we are very neutral. We are handcuffed with the entire energy situation in the European Union. That is something you will have to watch.
But as things stand right now, if we get a bit of a bounce here with these dropping German 10-year yields, to me, it looks slightly positive, with an emphasis on the word slightly.
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