DAX Index Price Forecast November 2, 2017, Technical Analysis

The German index gapped higher at the open on Wednesday, clearing the vital €13,250 level. This is an area that I’ve been watching for some time, as we have been forming a bit of an ascending triangle on the hourly chart. This market clearing the €13,250 level signifies that we are ready to start the next leg higher. During the day, we reached towards the €13,500 level, which is a significant move in one short day. I believe that pullbacks are what we need to see to get involved at this point. If you are not long of the DAX already, waiting for the market to drop is probably the best way to go. The €13,250 level should now be supportive, so a pullback to anywhere near that area with a bounce or supportive candle could be a nice opportunity to go long.

I’d be a bit hesitant to start buying at this point, because quite frankly we move so quickly that it’s likely we need to pull back to build the necessary momentum to continue higher. I do think that happens though, especially with the EUR/USD pair falling the way it has. In fact, I believe the EUR/USD pair it’s probably going to go to the 1.13 level underneath, and that should continue to be good for European stock indices overall, which of course the DAX is the bellwether. With that, I’d be really surprised to see the market break down below the €13,250 level, and as a result I look at it as the “floor” in the market now. I have a longer-term target of €14,000, and perhaps even €15,000 after that. In the meantime, I look at €13,500 as a bit of a resistance barrier that the market will need to deal with.

DAX Video 02.11.17