The DAX fell a bit on Friday to test the crucial 50 Day EMA, an indicator that will continue to attract a lot of attention from technical traders. With this, I am looking for value to take advantage of.
DAX
The German index fell during the trading session on Friday as we continue to see a lot of concerns in the European Union about the possibility of energy disruption. It has become abundantly clear that the United States is starting to leave the European Union behind. As a result, concerns about energy this winter in Germany—especially natural gas—continue to weigh upon the vital industrial sector.
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Testing the 50-day EMA is an important technical factor. It is an area that will attract attention not only due to the indicator’s importance itself, but also because it previously had been resistance near the €25,750 level or so. We are trying to bounce from there. We will see whether or not we can.
Taking out Wednesday’s highs is the signal
But we have to wipe out that really bullish candlestick on Wednesday to get bullish. Now, it looks like a market that is trying to figure out whether or not it can find its momentum. If the market were to break back above the €26,000 level, I might be a little bit more impressed and willing to buy.
But as we stand right now, even if we fall from here, I am not going to be shorting the DAX. If I am going to be shorting indices, it will be smaller ones. The DAX, of course, will be the first place that money goes when traders start to look to invest in the European Union.
Again, breaking above the €26,000 level would be a very good sign and could open up the possibility of a move to the €26,600 region.
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