DAX Price Forecast October 27, 2017, Technical Analysis

The German index skyrocketed during the day on Thursday, as Mario Draghi suggested that although quantitative easing will be cut in half, it’s going to be run almost an entire year longer than originally thought. This has money flowing into the DAX, as the EUR/USD pair broke down significantly. With a cheaper currency, this helps the Germans send exports around the world as their products become more affordable. One of the biggest concerns of equity traders in the European Union currently is that the currency rallies too quickly. With that in mind, when you look at this chart it’s obvious that we are bit overbought. I look at this market as one that should be offering buying opportunities underneath, so a pullback should be a nice buying opportunity as the €13,000 level underneath looks to be very important.

Pullbacks from here should find buyers jumping in at roughly €13,050, and then perhaps at multiple points underneath. I still have a target of much higher levels, but I think that we are getting a bit ahead of ourselves as far as having a sustainable rally is concerned. The market continues to be noisy, but has been in an uptrend for some time. Ultimately, I believe that the overall trend should continue, and that should be the best way to trade this market, expecting it to go higher over the longer term. Being careful and adding to your small position to the upside is probably the best way to play this market, but I think we need to find value in this area first. I believe that the uptrend is supported at the €12,900 level as well, and that’s essentially the “floor” in the market. If we can stay above there, there’s no reason to start selling anytime soon.

DAX Video 27.10.17