DAX Index Price Forecast July 11, 2017, Technical Analysis

The German index gapped higher at the open on Monday, and then pulled back to fill the gap and then rallied again. It looks as if we are trying to build up enough momentum to finally shoot above the €12,500 level. A break above there would be a very bullish sign, and should send this market to the €12,600 level. Pay attention to the EUR/USD, because this pair does tend to influence the DAX. If the EUR/USD continues to rally, that could put bearish pressure on German exports, which has a negative effect on this market. However, if it falls, that could be enough to push this market back above the €12,500 level, which would be a very good sign, and should send this market to the upside.

Volatility

I think the given enough time it is going to be volatility that is a mainstay of this market. A break above the €12,500 level should continue the longer-term uptrend, but if we were to break down below the €12,300 level, that could be very negative and have the market testing the €12,000 level underneath. That is a major floor in the uptrend, and as long as we can stay above there, the market will more than likely continue to find buyers on dips longer term. Currency headwinds of course will be an issue, but I think in the meantime the markets are looking for a reason to rally, and simply waiting for that to occur. Expect choppiness and volatility, but longer-term I still have a lot of faith in the DAX as we are possibly trying to build up in an accumulation phase, which makes sense as we get these from time to time on larger pullbacks in even larger uptrends that last months.

DAX Video 11.7.17