- The DAX initially pulled back during the trading session on Tuesday, but we’ve seen more strength pull into this market and we are now above the crucial 24,000 level.
- At this point, I think it’s pretty clear that the DAX is in a strong uptrend. I don’t think that changes anytime soon. And in fact, the session on Tuesday has driven home the point that if we do drop there are going to be buyers based on the measured move of this consolidation area, which we actually sliced right through, you should be looking at a move to about 24,500 euros.
Whether or not that happens easily is a completely different question. And of course, we also have to ask the question about momentum. You know, do we need to pull back here in order to build some up? I don’t think so. Although one issue does have a little bit of a red flag to it, and that’s the volume dropping a bit while the price is rising. Are we starting to see a little bit of divergence? If we do, I don’t think it’s the end of the trend. I just think we will pull back in order to find more buyers, probably near the 23,500 level.
This assumes, of course, that we even pull back. I’ve seen this before, it’s not the end of the world, it’s just a thing that happens from time to time.
I have no interest in getting short of the DAX, and I think the DAX will continue to lead the rest of Europe as far as indices are concerned, which makes sense. It’s typically the first place people put money to work is in Germany when they are trying to play European equities. And therefore, I think the 23,500 euros level probably acts as a bit of a floor now that we have completely broken above it and we now look extraordinarily strong.
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Christopher Lewis has been trading Forex and has over 20 years experience in financial markets. Chris has been a regular contributor to Daily Forex since the early days of the site. He writes about Forex for several online publications, including FX Empire, Investing.com, and his own site, aptly named The Trader Guy. Chris favours technical analysis methods to identify his trades and likes to trade equity indices and commodities as well as Forex. He favours a longer-term trading style, and his trades often last for days or weeks.
