- German DAX dropped slightly during the trading session on Friday as we continue to see a little bit of back and forth action as we are hanging around the 50 day EMA and are in the midst of a symmetrical triangle.
- At this point, the market looks as if it’s going to have to make a bigger decision one way or the other.
If we can break above the 50 day EMA, then the market could go looking at the 24,600 level. If we break down from here, the 23,250 level gets targeted as it is support. And therefore, I think we are trying to build up a little bit of momentum, but we are still very much in the same range that we have been in for some time.
Ultimately, if we break down below the 23,000 level, then that’s a very negative sign, but right now, I don’t see that quite yet. The ECB has decided to sit still with its interest rates, and it suggested that it was very data dependent. So, I think we’ve got a situation where traders are going to be paying close attention to all the German economic numbers to get an idea as to how the German economy is functioning as per usual, but they will also take everything into account around the continent to see what the ECB might do.
Watch ALL of Europe
So really poor French numbers, for example, might be a backdoor way to get an idea as to how the DAX might move. Ultimately, this is a market that remains somewhat sideways overall, but I think you’ve got a situation where traders are likely to continue to see more of a buy on the dip attitude, unless of course we break down below the 200 day EMA and then from a longer term standpoint you are technically in a downtrend. That being said, it is worth noting the buyers step back in to at least somewhat pick up the market later in the day.
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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.
