DAX Forecast: Bounces During the Wednesday Session – 08 September 2022
Speaking of the Euro, you should also pay close attention to the news conference from the European Central Bank, after what should be a 75 basis point rate hike on Thursday.
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It’s obvious that the EUR12,500 level is offering a certain amount of support, so pay close attention to that level. If we were to break down through it, that could open up fresh selling, perhaps sending this market down to the EUR12,000 level. Keep in mind that risk appetite is extraordinarily poor right now, but it does make a certain amount of sense that the DAX might have a little bit of a reprieve in the short term, as we have seen the same thing in other risk appetite-related assets such as crypto, gold, and even the Euro.
Speaking of the Euro, you should also pay close attention to the news conference from the European Central Bank, after what should be a 75 basis point rate hike on Thursday. If it is lower than anticipated, that will probably be good for the DAX, as the Euro will more likely than not drift lower. However, a lot of what we see will come down to what people interpret from the press conference. These days are very typically volatile, so therefore you need to be aware of the fact that the DAX may be very noisy and choppy, to say the least.
The size of the candlestick is somewhat impressive, and it is worth noting that we have broken above the top of the inverted hammer from the previous session, which is almost always a very bullish sign. With that being the case, I think we get a situation where we have a little further to go before the seller’s return. The 50-Day EMA is also an area that I would pay close attention to, which sits near the EUR13,250 level. The market is still very much in a downtrend, but a lot of what happens next will come down to that press conference tomorrow.
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