DAX Index Price Forecast July 7, 2017, Technical Analysis

The German index fell apart during the day on Thursday, as the €12,500 level has offered enough resistance to turn things around. We have tested the €12,300 level underneath for support, but it looks as if we are going to continue to grind to the downside. The DAX of course will be highly pressured by what happens in the EUR/USD pair. If the EUR/USD pair rallies, that should work against the value of the DAX, as it hurts the German export market. A breakdown of the German export markets of course work against the DAX as it is highly leveraged to that action. I think that the jobs number will of course be influential and what happens to the US dollar, and of course the outlook for the Federal Reserve and its interest rate policy. If the EUR/USD pair rolls over, that’ll be very good for the DAX and could send this market above the €12,500 level too much higher levels.

Alternately, if the dollar falls…

The US dollar falls, that will work against the value of the pair, and that should send the market down to the €12,000 level. I believe that the €12,000 level underneath will be massive support, and essentially be the bottom of the uptrend that we have seen for so many months. A breakdown below there would be catastrophic for the DAX as far as I can see, and that of course is likely to be a sign that much lower levels are in our future. Ultimately, this is a market that should continue to be volatile, but I think we are getting close to the bottom of the recent trends and actions. If we can break out to the upside, the market should continue to be one that you can buy on dips.

DAX Video 07.7.17