German index rallies during the trading session on Tuesday

The German index has rallied significantly on Tuesday, breaking above the €13,150 level rather handily. It looks as if were going to test the €13,200 level couple of times, and then break out to the upside. I believe that the Euro falling overall continues offer upward pressure on the DAX, as it makes German exports cheaper. However, there are some issues out there to worry about, not the least of which of course would be Deutsche Bank. However, beyond that I think that most people are looking at the totality of the German economy, and the fact that the DAX is essentially the “blue-chip index” of the European Union in general. If you put money to work in Europe, you’re going to look to Germany first.

I think the €13,000 level underneath will offer a bit of a “floor”, and that the bottom of the overall uptrend is closer to the €12,750 level going forward. If we break down below there, then things could change rather rapidly for the DAX. However, I think that we continue to see value hunters coming back into the market every time at dips, and I do believe that eventually we reach as high as €15,000, perhaps some time later in the year towards winter. That’s my longer-term target, and I believe that if the EUR/USD pair can break below the 1.15 handle, we could very well see that move much quicker than I anticipate.

DAX Video 23.05.18