DAX Price Forecast July 18, 2017, Technical Analysis

The German index had a slightly negative session on Monday as the 24-hour exponential moving average is starting to turn down. However, I think the €12,500 level underneath will offer support, so I’m looking at this pullback as a potential buying opportunity on signs of support. The markets have formed a massive “W pattern”, which of course is a very bullish sign. Because of this, I believe that we will reach the €12,750 level relatively soon, and then perhaps break above there. This is a very quiet time of year, so it may take a while to get there. Expecting big moves will probably lead to disappointment.

Buying dips and/or bounces

I believe in buying dips in this market, but I also believe in buying bounces. This being said, I have no interest in shorting the DAX, I believe a continues to outperform many other indices that I follow around the world, and most certainly the ones in the European Union. The EUR/USD pair looks as if it is trying to break out, and that could work against the value of the DAX short-term, but I think longer-term people will look past that as it shows signs of strength in the European economy, not necessarily massive currency headwinds for German exports as typically is the case.

DAX Video 18.7.17