DAX forecast for the week of August 7, 2017, Technical Analysis
The German index initially fell during the week, but found support at the 12,100 level. This is an area that has a gap, and that suggests that we are going to bounce significantly and reach towards the €12,500 level. This was exacerbated by the move in the EUR/USD pair on Friday, as the jobs number in America came out stronger than anticipated. Because of this, the Federal Reserve is likely to raise interest rates, and that could put a little bit of downward pressure on the EUR/USD pair, which helps with German exports. However, the European Union seems to be recovering, and that should help the DAX as well. I think that the €12,000 level underneath should be massively supportive, and is not until we break down below there that I’m willing to start selling again. I think we could go looking towards the highs, but it might be volatile on the way out.
Buying pullbacks
It’s a longer-term bullish market that I’m looking at, so buying dips makes sense. We’ve had a significant selling of the DAX that was good for €800. That’s a value proposition for longer-term traders, so therefore think people are starting to add to their positions. The currency markets of course could help, and that is only going to add to the pressure to the upside. The €13,000 level above is a target, and I think that once we break above there we should start looking for the €14,000 level as well. I have no interest in shorting, least not until we break significantly below the €12,000 level which should then send this market to the €11,500 level, but I believe that it is much more likely that we rise than fall over the next several weeks.
DAX Video 07.8.17
This article was originally posted on FX Empire