DAX Index Price Forecast July 19, 2017, Technical Analysis

The DAX gapped lower at the open on Tuesday, and then sliced through the €12,500 level. It looks as if a lot of this was due to the EUR/USD pair breaking above the 1.15 level, which is a massive spot on the chart. This was the top of consolidation for the last 2 ½ years, so this makes German exports much more expensive. If that’s the case, it’s likely that the DAX will continue to face significant headwinds as we continue to see the EUR pickup value. If the currency markets continue to go higher in that pair, that will drive the DAX lower. I still believe that the very bottom of the uptrend is close to the €12,000 level, but I believe in the short term it’s likely that we will find sellers in the 12,500 level. A break above there has me buying again, as I think it would show a strong resilience in the DAX.

Small positions

I believe that trading small positions will be absolute paramount in this market, as is very likely that the moves will be sudden and violent. If you can be patient, you could pick up some type of position, and add to it as it goes in your favor. I believe that eventually the market may turn around but in the short term I think that a lot of traders are concerned about the EUR gaining so much value. Given enough time though, I think we will see a significant impulsive move that clarifies the next directionality of the market. Once that happens, I more than willing to buy or sell a little bit and continue to add to position. All things been equal though, I do believe that we go higher, but of course will need to see some type of affirmation.

DAX Video 19.7.17