The German index went sideways during the trading session on Wednesday, using the €13,350 level for support. Below there, there is a massive gap that fired off several sessions ago, and it has yet to be filled. I believe that a breakdown below the €13,500 level should send this market down to the €13,250 level. That is the bottom of the gap, and an area that should be massively supportive. The market could very well try to go down to that level to find buyers, but I think that overall it should be thought of as a value proposition. I have no interest in shorting the DAX, I believe that the EUR/USD pair continues to fall, even though we’ve had a little bit of a rally during the day. Overall, that is good for the DAX, as it makes the DAX rally due to cheaper German exports. I also believe that we will eventually break above the €13,500 level, which could send this market much higher. The market has been in an uptrend for quite some time, and there is nothing on the chart that tells me we are about to change the overall trend.
If we were to break down below the €13,200 level, that would be a significant turn of events, but quite frankly I think it’s going to take a lot of work to have that happen. If we were to break down below there, I see a lot of interest at the €13,000 level as well, but this is the least likely of scenarios I see. Quite frankly, I think it would be easier for this market break out to the upside and simply continue to go higher. Pay attention to the EUR/USD pair, the negative correlation has been holding up quite nicely.
DAX Video 09.11.17
This article was originally posted on FX Empire
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