- The German index has gone back and forth during the trading session, settling on a slightly positive candlestick for about 20 basis point gain.
- But really at this point in time, I think a lot of the oxygen has been taken out of the air due to the fact that the FOMC has its interest rate decision late in the session.
If we were to pull back, I think it would end up being a buying opportunity, mainly due to the fact that the ECB is likely to start loosening monetary policy and that of course will help with exports, at least that's the idea. Germany, obviously a major exporter coming out of the EU will be a big beneficiary of this, so, it makes sense. Confidence numbers in the German business world, though, are miserable at the moment, and that’s no help for currency strength, allowing exports to grow.
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ECB Looks at Ifo With Caution
Again, that probably prompts the central bank to start handing out stimulus, and therefore stocks should do fairly well. The 20,000 euros level underneath is support right along with the 19,750 euros level. So I do think that any pullback will be looked at as an opportunity. If we can break above the 20,500 euros level, then it's possible that we could really start to take off to the upside.
All of that being said, keep in mind that there are plenty of central bank announcements out there, including the United States, the Bank of Japan, and Great Britain. All of this could come into the periphery here to give us an idea of where we go next, as far as a risk appetite situation is concerned. But really at this point the most important takeaway from this chart is just how bullish the DAX has been.
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