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The German index has broken down through the €12,750 level during trading on Tuesday, which is of course an area that has been important more than once. We reached down towards the €12,600 level below there, an area that was previous resistance, and now of course should offer some sign of support. Ultimately, I am paying attention to this market because there are so many concerns around the world when it comes to Italian bonds. The DAX is the first place that people will put money to work when it comes to the European Union, and it’s very interesting to pay attention to this market as people are so concerned about problems in the European Union when it comes to the Italian bond market, and then the market should react accordingly. I think that this market will rally if the bond market in Italy comes down, but even if it doesn’t, I believe the DAX will be “less bad” than other markets in the EU.
If we can break above the €12,750 level, then the market is free to go to the €13,000 level after that. I believe that there are a lot of reasons to think that this market will be very noisy, and if we break down below the €12,600 level we could find support again at the €12,500 level. We are in and uptrend overall, so keep that in mind, and I think that the easier route is to the upside, but there is obviously a lot of fear coming out of Rome.
DAX Video 30.05.18
This article was originally posted on FX Empire