The German index rallied on Monday, reaching towards the €12,500 level. That’s an area that of course is going to attract a lot of attention due to the psychological significance of the number, and previous action in this area. If we can break above the €12,500 level for a couple of hours, I believe that the market will then go looking towards the 12,700 level above. Alternately, if the market finds resistance in this area, then I think it will roll over and go looking for the €12,400 level. The DAX of course is highly sensitive to German exports, which of course will be highly sensitive to the value of the EUR/USD pair.
The EUR/USD pair fell on Monday
The EUR/USD pair fell during the day on Monday, that of course is good for German exports, as it makes them cheaper. I think that’s what most of the rally is about, so we will have to wait and see if this trend continues. One thing that I would say is that the EUR/USD pair is rolling over from what was the highs from a three-year consolidation range, and that of course has a lot of influence on where the currency will go next. I think that the DAX should in theory be a bullish market, but keep in mind that there is a lot of volatility just waiting to happen, so you should keep an eye on where we are trading in the currency markets as well as the index. The markets of course continue to be in and inverse correlation as they tend to be longer term, so trading one in one direction should have you trading the other in the opposite. The 24-hour exponential moving average has started to turn to the upside, so that should be a buying opportunity.
DAX Video 04.7.17
This article was originally posted on FX Empire