DAX Index Price Forecast August 3, 2017, Technical Analysis

The German index fell a bit during the day on Wednesday, but found support near the €12,100 level. The market looks likely to bounce from here, but I think there is quite a bit of noise just waiting to happen. The €12,000 level underneath is essentially the “floor” in the market, and more importantly, the bottom of the uptrend. If we can bounce from here, I think the given enough time we should reach towards the €12,500 level. I believe in buying dips when it comes to the DAX, but we are facing a significant amount of headwind because of the rising value of the EUR/USD pair. This makes German exports more expensive, but the fact that the currency is going higher is due to the fact that the European economy itself is doing better than anticipated.

Buying dips

I continue to buy dips, and I think that it’s only a matter of time before we reach towards the €12,500 level. If we can break above there, the market should continue to go much higher, offering a “buy-and-hold” situation. The €13,000 level will be the target after that, but obviously this is much more of a longer-term play. In the meantime, I believe that we are entering an accumulation phase, and therefore I think that value hunters are starting to get involved. If we did breakdown below the €12,000 level on a daily chart, then I think it’s time to start selling aggressively as it would be very negative when it comes to the DAX.

DAX Video 03.8.17