DAX Index Price Forecast October 20, 2017, Technical Analysis

The German index fell rather precipitously during the session on Thursday, slicing through the €13,000 level. We fell down to the €12,900 level, but then turned around to bounce significantly. The €13,000 level offer psychological resistance, but quite frankly we have broken above it more than once, so I don’t think it’s going to be a big deal. I’m a buyer above the €13,000 level, as it shows the market becoming more stable, and I believe that this short-term pullback will be looked at as potential buying opportunity, especially considering that the €12,900 level held so significantly.

Once we do breakout above the €13,000 level, the market should then go to the €13,100 level again, and then I think breakout above there for a longer-term move. I recognize that it is going to be difficult to do that, but longer-term momentum still favors the upside so I think that the overall attitude of the market should be a “buy on the dips” situation. The market should eventually go to the €13,500 level, but that is a longer-term call, something that’s going to take a while to get to. Ultimately, this market should continue to find buyers based upon the fact that the German index is the mainstay of the European Union, essentially the “blue-chip” index. I believe that the DAX is reacting somewhat negatively to the EUR/USD pair rallying, but at the end of the day it is rallying because of the strength of the European Union economy, that being the case, even though it hurts exports coming out of Germany, it’s also a sign that we should see renewed fundamental strength in the economy, and over the longer term that of course wins. The longer-term uptrend is very much intact, and I think it will remain so for the foreseeable future.

DAX Video 20.10.17