DAX, CAC and IBEX Forecast – EU Indices Attempting to Rally After Selling Pressures

DAX Technical Analysis

The German index fell initially during the early hours here on Wednesday, only to turn around and bounce a bit. It looks as if the DAX is trying to recover and perhaps jump back above the 200-day EMA. If and when it can, I think you have a situation where the DAX could very well go looking to the 25,000-euro level, assuming everything works out.

We are still technically in an uptrend, but keep in mind that the Europeans are going to have issues with natural gas and that has a major drag on the economy. We’ll just have to wait and see how that plays out, but as things stand right now, the DAX looks like it is at least trying to bounce.

CAC Technical Analysis

The CAC in Paris has bounced from the 200-day EMA. It looks like it could very well be an opportunity for those who are quick. The market bouncing from here could open up the possibility of a move to the 8,400-euro level, possibly even the 8,500-euro level. Underneath the 200-day EMA, we have the 8,000-euro level offering support, not only due to previous action but the psychology of that figure as well. I have no interest in trying to short this market, at least not here. It’s a little oversold. This could just be an oversold bounce. We’ll have to wait and see, but clearly, we’re in an area where if Paris is going to recover, it makes a lot of sense for it to do it right here.

IBEX Technical Analysis

The Spanish IBEX has taken off during the trading session, recovering about half of the losses from the previous session as we have bounced from the 17,000-euro level. The IBEX, of course, will be a pretty quick mover at times, and one will have to be very cautious about what happens next. But I think ultimately this is a market that as long as we can hang out above the 17,000-euro level, it has a chance to recover its previous trend. If we break down below the lows of the last 2 candlesticks, then I think we drop to the 200-day EMA.

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