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DAX Forecast November 16, 2015, Technical Analysis

By:
Christopher Lewis
Updated: Nov 14, 2015, 05:38 UTC

The DAX fell during the course of the session on Friday as all European indices did, testing the €10,600 handle. This level was the top of the gap that

DAX Forecast November 16, 2015, Technical Analysis

The DAX fell during the course of the session on Friday as all European indices did, testing the €10,600 handle. This level was the top of the gap that formed recently, so we feel that the market probably has to drop to the bottom of that gap in order to find some type of support. The €10,500 level below is supportive, and in fact we feel that it will keep this market going higher. A supportive candle in this general vicinity should attract a lot of buying pressure, as we have broken out recently. That recent breakout should now end up being support as is the case in most technical analysis scenarios, so we are going to sit on the sidelines and wait to see whether or not we get that candle in order to start going long again.

Keep in mind that the DAX tends to be one of the better performers in the European Union, as it is considered to be the “most stable” and “safest” index in the region. On top of that, you keep in mind that the EUR/USD pair continues to fall overall, and that should drive the export numbers out of Germany up. That of course will drive the value of the DAX up as well.

It looks as if the market has plenty of interest in this area, so if we can break from here we believe that we go higher and reach towards the €11,000 level. That area has been resistive previously, and it should be resistance in the future as well. It takes several attempts to break above areas like this sometimes, and I think that’s what we are looking at right now. Supportive candles will make another attempt to break above the €11,000 level, but once we get above there becomes more of a “buy-and-hold” type situation. The €10,500 level is a significant support area, as it formed such a nice gap higher. The impulsive candle that sits just below there shows quite a bit of strength as well. In other words, this is a “buy only” market at this point.

 

DAX Forecast November 16, 2015, Technical Analysis
DAX Forecast November 16, 2015, Technical Analysis

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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