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German index rallies during the week, showing strength yet again as we clear major milestone

By:
Christopher Lewis
Updated: May 19, 2018, 07:28 UTC

German markets rallied again during the week, breaking above the €13,000 level, which is a major round number the people will be paying attention to. I think that the market should continue to find plenty of buying opportunities on dips, and I believe that we have support just below the €12,750 level.

Dax weekly chart, May 21, 2018

The German index rallied during the week, reaching towards the €13,100 level, as we have broken above the €13,000 level. The market should continue to show signs of value hunting on pullbacks, and I think that the €12,750 level will offer a bit of a floor. I believe that the EUR/USD pair is showing signs of breaking down, and if it continues to do so we should see the DAX market continue to go much higher. Once we break above the €13,600 level, that could be a very bullish sign and we could continue to go much higher.

I believe that short-term pullbacks continue to offer value the people take advantage of, and I believe that there is essentially a “floor” in the market at the €12,000 level. I don’t have any interest in shorting this market, and I believe that we will continue to find plenty of reasons for the market to go higher, not the least of which is going to be the currency situation. Beyond that, we should also pay attention to the fact that the European Central Bank is likely to keep interest rates very low. Because of this, that should continue to have people jumping into equities in the European Union, and that certainly means the DAX as it is the “blue-chip index” of the region. I have no interest in shorting this market, at least not until we break down below the €11,800 level.

DAX Video 21.05.18

About the Author

Being FXEmpire’s analyst since the early days of the website, Chris has over 20 years of experience across various markets and assets – currencies, indices, and commodities. He is a proprietary trader as well trading institutional accounts.

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