DAX, CAC and FTSE Forecasts – European Area Indices Hesitate but Show Signs of Dip Buying

DAX 40 Technical Analysis

The DAX in Germany did fall initially to kick off the trading session but you can see that we have turned around to show signs of life with the 200-day EMA offering a bit of a floor. With that being the case, it’s a very good look at the moment. It looks like we might be starting to see the first signs of the DAX turning things around.

The 200-day holding will, of course, be a major technical signal for a lot of traders, and at this point, I still like the DAX. I’ve liked the DAX for the last couple of days; I just needed to see signs of resiliency. We may finally be getting that, but if we were to break down below the 50-day EMA, that would be a bad sign.

CAC 40 Technical Analysis

The CAC in Paris is also turning things around and it looks like it’s going to start fighting back. The 8,200-euro level looks to be an area that causes a little bit of resistance; breaking above there opens up the possibility of 8,350 euros being targeted. To the downside, the 200-day EMA at 8,068 will continue to offer support.

The CAC in Paris, of course, is driven by a lot of luxury, so you do need a risk appetite. It does look like it’s trying to come back. For what it’s worth, interest rates early on Thursday spiked a little bit, but they have pulled back and that coincides with this candlestick.

FTSE 100 Technical Analysis

The FTSE 100 in London is set on the 50-day EMA, and it is a little bit different than the other two, but I would postulate this probably has more to do with the fact that the Bank of England is likely to remain fairly tight. Of course, we have the problem with the British Pound being a little bit strong anyway.

We’ve seen manufacturing and services PMI numbers coming out of Britain higher than anticipated, so I think this is probably the market whining about those tight rates. Nonetheless, I think this is a buy on the dip opportunity. If we can turn around and break above the 10,500 level, that would be a very strong sign. Out of the three, though, this is my least favorite, at least for the next few days.