- The DAX has found itself to be a bit negative during the uh early part of the session and it now looks like we are going to close out the week with a pretty ugly candlestick.
- We are below the 50 day EMA and that suggests perhaps we are ready to go lower perhaps down to the 23,500 level, maybe even as low as 23,250.
- In general, I think this is a situation where we're just lost. We don't have anywhere to be right now. And as we are closing out the summer, I have to admit, a lot of these indices that I follow don't really look that great. They don't look horrible. They just don't look great. I think the markets are in a state of flux.
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The DAX is fairly easy to spot the range in. So, as we are in the middle of it, I think you have to be very cautious. I favor the upside, but we just don't have the balance at the moment to justify putting money into work. That might be the case for next week or so because most traders are just starting to come back from holiday and therefore really haven't been paying as much attention to the market as you would expect.
Furthermore, Federal Reserve cutting interest rates suggests that perhaps the US economy is starting to slow down and if that's the case, that's not good for the rest of the world. I understand that people think immediately that Europe is going to be the beneficiary, but that's not how this game works. As the United States is the endpoint for the global supply chain under normal circumstances, export countries like Germany will suffer at the hands of a US recession. We'll just have to wait and see how that plays out though. Right now, we're just meandering, so be cautious, recognize that we are in the middle of a larger consolidation zone.
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