The DAX continues to dance around an important area, as we are looking at a market that has recently seen a lot of noise, but is perhaps attracting value hunters on Tuesday.
DAX
The German index has pulled back just a bit during the early part of the trading session on Tuesday, but found the 200-day EMA to be an area where a lot of value hunters came back in.
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With this being the case, it looks very much like a market that is going to perhaps act a little bit technically. It is also worth noting that the area is supported all the way down to perhaps the €24,700 level, as it is a major area of demand that has been pushed back upon a couple of times.
If the market were to turn around and break to the upside
We do have the 50-day EMA that we need to keep in the back of our mind as a potential resistance barrier, now at €25,472. If we were to break above there, then it opens up the possibility of a move towards the €25,750 level.
Ultimately, this is a market that continues to see a lot of noise, as we are between both the 200-day EMA and the 50-day EMA indicators. A lot of times, that causes a bit of a squeeze.
I also would point out the fact that yields are starting to drop worldwide, and perhaps some of it is due to the fact that the French are putting curfews out there. With that being the case, it's likely that the political situation in France might be looked at as cooling off a bit, and that bleeds into Germany.
We also have to pay attention to natural gas and the European Union, as well as crude oil. Those are two major problems for Germany. We do have SAP earnings coming out, I believe, tomorrow, so that will be a big mover of the DAX as well.
But we are sitting in an area where you would expect to see some support. So, short-term pullbacks could offer short-term buying opportunities.
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