DAX Forecast: Shows Buying Support After Initial Dip on Thursday
Either way, I think you need to be very cautious with your position sizing at the moment because we are most certainly in an area that will cause a lot of back-and-forth noise.
On the downside, if we were to break down below the 50-Day EMA, then it’s possible that we could go down to the 200-Day EMA which is closer to the EUR14,350 level but is also rising. That would be your next target, and it should be noted that Germany is outperforming all of the other European indices out there, so it does make sense that you need to pay close attention to this chart. After all, it could lead the rest of the European Union to either higher or lower.
Either way, I think you need to be very cautious with your position sizing at the moment because we are most certainly in an area that will cause a lot of back-and-forth noise. However, if we were to break above the recent resistance barrier, it’s possible that we could see more of a “beach ball being held underwater” effect. In other words, it could pop rather hard, dragging other indices in the European Union right along with it if you do happen to miss this one.
For example, you could trade the AMX, the MIB, or the IBEX, using the DAX as a leading indicator. The exact opposite is true as well, meaning that if Germany falls, the rest of these markets will probably get hammered as they are smaller and less liquid. Another chart to pay close attention to is the CAC Quarante in Paris, as it is also a major player in the EU that has a lot of external influence on other markets.
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