The DAX initially gaps higher at the open on Monday, showing signs of resiliency yet again. I believe that the DAX continues to grind its way to the upside, eventually reaching the €13,000 level. A break above there would be very bullish, and should send this market much higher. Ultimately, I think that dips continue to offer value the traders will take advantage of, as the DAX leads the rest the European Union higher. Remember, the DAX is considered to be the “blue-chip index” of the European Union as Germany’s economy is the strongest by far. With this in mind, I like buying dips as they represent value and I think that there is plenty of support below the €1800 level for the short-term market buying.
Even if we were to break down below the €12,800 level, I suspect that there is quite a bit of psychological importance to the €12,500 level below there as well, so I think that it’s only matter of time for the buyers return. The EUR/USD pair can have an inverse correlation as it represents the value of exports out of Germany, but at the end of the day I think that this pair is going to go higher regardless. It is not until we break down below the €12,500 level that I would become concerned with the uptrend, which I think is defined with a floor at the €12,000 level. Ultimately, I have a longer-term target of €50,000, but that’s probably later in 2018 before we get there. Algorithmic traders continue to buy dips in stock markets around the world, with the DAX being one of the main places where they put money to work. Ultimately, I am very bullish of this market and recognize that building positions over time will continue to offer profits.
DAX Video 03.10.17
This article was originally posted on FX Empire