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DAX Index Price forecast for the week of January 22, 2018, Technical Analysis

Christopher Lewis
Updated
The German index initially fell during the week, but found enough buying pressure to break out to the upside. It now looks as if we are trying to clear major resistance just above, as the uptrend continues.

The German index continues to be very bullish overall, but we did initially pull back during the week. The market turned around, and reached towards the €13,450 level. If we can clear the €13,500 level, I feel that the market will continue to go higher, perhaps offering more of a “buy-and-hold” feel to it. I think that the market continues to find buyers on dips, as the DAX is the gateway to the European Union for most traders. The German economy is over 80% of the value of the U, so it makes sense that the German stock market will be a beneficiary of money flowing into the market.

The €13,000 level underneath continues to be massively supportive, and it is not until we break down below the €12,800 level that the support “zone” is broken through and the sellers can rejoice. Until then, I look at dips as buying opportunities, and I believe that the market will continue to go higher based upon the German economy doing so well, and of course the global economy seemingly ready to pick up overall. Stock markets tend to move in the same direction overall, and global stock markets are all bullish. The DAX is one of the “blue-chip” indices around the world, so I think that the institutional money will continue to flow into it. If we did breakdown below the €12,800 level, then I think we probably go looking towards the €12,000. However, that’s the least likely of scenarios that I see.

DAX Video 22.01.18

This article was originally posted on FX Empire

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