DAX Index Price Forecast July 5, 2017, Technical Analysis
The German index was very volatile during the session on Tuesday, as the 24-hour exponential moving average continues to offer support. I think that the market sees quite a bit of resistance in the form of the 12,500 level, and if we can break above there, that should be a very bullish sign, and it should send this market looking towards the 12,750 level after that. I think that short-term pullbacks will continue to be buying opportunities, a least if we can stay above the moving average, which has been reliable. A breakdown from here should send this market down to the 12,250 level which is massively supportive based upon the recent reaction.
EUR/USD correlation
If the EUR/USD continues to look soft, that should help the DAX, as it helps German exports. That’s the typical correlation, but we will have to see if it holds. It certainly gives you a reason to buy the DAX, as it is so highly leveraged to the export market of Germany. Ultimately, I believe that the market will decide at 12,500 as far as the next several hundred points, so pay attention to what happens over the next couple of sessions. If we break down, I think the market will go looking for the 12,000 level over the longer term. Alternately, if we rally I think eventually we could go looking towards the 13,000 handle. The DAX continues to be very choppy, but will eventually make a decision and grind in one of the directions. The market should continue to pick up momentum over the longer term, as we are looking to perhaps climbing wall of worry after the fall from a couple of days ago. The market will continue to move on currency actions.
DAX Video 05.7.17
This article was originally posted on FX Empire