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The German index fell a bit during the trading session on Monday, reaching down towards the €12,800 level before bouncing. I see a significant amount of support near the €12,750 level, and I think it’s essentially the “floor” in the market. Now that we have had this couple of bounces, it’s likely that we will continue to go back and forth in this general vicinity. Ultimately, this is a market that I think will continue to see a lot of noise, but if we were to break above the €13,000 level again, we could go towards the highs, and beyond. I believe there is plenty of support at the €12,750 level, so I’m looking to pick up value once we get close to this area.
If we did break down below the €12,600 level, then I think the market probably drops down towards the €12,300 level after that. Longer-term, I believe that the DAX continues to go higher, but we have a lot of trouble coming out of Italy, and that is influencing everything that’s going on in Europe. However, a lot of times Europeans will throw money at Germany in a bid to find some safety, leaving places like Italy where we see a lot of trouble right now. Because of this, the DAX will more than likely be the strongest index coming out of the European Union, but that’s nothing new. An alternate way to look at this is that if the MIB or the CAC fall, the DAX should fall quite a bit less.
DAX Video 29.05.18
This article was originally posted on FX Empire