DAX Index Price Forecast July 6, 2017, Technical Analysis

The German index went sideways on Wednesday again, as we continue to tread water just below the €12,500 level above. A break above that level should be a very bullish sign, and it should send this market looking towards the €12,650 level next. I think that the market continues to be one that will be very choppy, and it is not until we break above that level that I think you can buying this index. Alternately though, there is a significant amount of support underneath, especially near the €12,350 level. A breakdown below there would be negative, but ultimately, I think it’s only a matter of time before we break to the upside from what I see. The market should continue to be difficult to navigate, at least until we get some type of impulsivity that we can follow.

On the sidelines

I believe that being on the sidelines is probably the best way to trade this market as we are currently waiting for some type of clarity. The currency markets have been very erratic, as the EUR/USD pair has pulled back from a massive move to the upside. A break above the 1.15 level should be a bullish sign, and the market should continue to go much higher. That would be very negative for the DAX as it would make German exports very expensive. Alternately, if the EUR/USD pair rolls over and starts to sell off, the market will favor the DAX in general. Because of this, the market should continue to be very sensitive to what happens in the Forex markets, as the markets will continue to focus on the idea of German exports driving the DAX itself. I suspect until we get a breakout, this is a market that is probably best to simply observe.

DAX Video 06.7.17