- The German DAX has rallied again during the trading session on Wednesday, as we continue to make fresh highs every day.
- At this point, the market is likely to go looking toward the €20,000 level, an area that of course will attract a lot of attention from a psychological standpoint.
- If we can break above there, then the DAX certainly will take off.
That being said, the market has been very bullish for some time, and I think it’s a situation where you have to look at it through the prism of a market that might have gotten a little stretched, so I’m not necessarily looking for the takeoff straight up in the air right away. Given enough time, it’s likely that we will continue to see buyers jump in and take advantage of every dip that they can, and I believe that the market has multiple support levels underneath that could lend a helping hand to that exact trade.
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Support below
The €18,600 level appears to be supported, as we had recently bounce from there in the last 48 hours, and of course it was previously resistance. With that being the case, I like the idea of taking advantage of any dip in this market in order to find value. The DAX of course will lead the rest of the European Union higher, so even if you are not trading this particular index, you do need to be aware of what it is doing.
Underneath the €18,600 level, the €18,250 level should be even more supportive, as the area previously had been such massive resistance. Because of this, I think you get a situation where you have to look at this through the prism of a market that is doing everything it can to go higher, and therefore you will eventually get an opportunity to take advantage of any value that appears. Ultimately, this is a market that I do believe goes much higher and therefore it is a “long only” asset at the moment. This will be especially true if the euro starts to shrink in value.
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