DAX, CAC and MIB Forecasts – EU Indices Soft on Tuesday

DAX Technical Analysis

The DAX in Germany has pulled back a bit during the trading session as it looks like we’re going to be able to hold above the 23,000-euro level, an area that I think is very important. But we have a lot of fear and a lot of anxiety out there as investors right now are questioning whether or not fiscal expansion in Germany can offset the strong euro drag on earnings.

But you also have to keep in mind that the DAX, of course, is going to be heavily influenced by the fact that interest rates continue to climb around the world and this could have a drag on exports as well as the Strait of Hormuz being closed, as energy coming to the European Union may continue to be a major issue.

CAC Technical Analysis

The CAC in Paris has reached the 200-day EMA but failed. It doesn’t necessarily mean that we have to fall apart, but right now it looks like it is basically being held up by luxury and banking sector names right around the 8,000-euro level. The question, of course, is whether or not the market can continue to the upside.

Luxury is holding up fairly well but there are concerns that lack of demand out of the Middle East may start to hurt some of the bigger names in Paris as well. So, watch the highs of the day right around 8,080 euros. If we can break above there, then it could be the signal that the CAC is ready to take off. Otherwise, we will probably continue to bounce around just below the 8,000 level.

MIB Technical Analysis

The MIB in Italy, of course, is a little bit positive for the day, although it’s given back much of its gains. Higher rates tend to boost bank margins and the MIB is heavily saturated with the massive banking sector.

With that being said, we are watching this very closely to see whether or not it can continue to rise. The 50-day EMA I think comes into the picture as a potential floor in the market. The 47,000 level, above, I believe, will eventually be your target. It’s going to be a very bumpy ride all the way back up there, though.

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