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DAX Index Price forecast for the week of March 19, 2018, Technical Analysis

Christopher Lewis
Updated
The German index initially fell during the week, but as you can see on the weekly chart we had formed a nice-looking hammer. The show signs of resiliency, and it also shows just how important the €12,000 level is underneath.

The German index fell during most of the week, but as you can see we found plenty of buyers near the €12,100 level, and then rallied again. By forming a hammer, the hammers suggesting to me that we are going to continue to go higher, and that the €12,000 level continues to be supportive. This coincides nicely with the uptrend line the see on the chart, so this point I think the DAX will eventually continue to go higher. I think that the €12,500 level is the gateway to a higher pricing, with the initial level being the €12,750 level. If we can break above there, then the market goes to the €13,500 level.

DAX Video 19.03.18

The alternate scenario of course is breaking down below the uptrend line, especially if we drop down below the €11,750 level. At that point, we would not only have a trend line break, but we would also have a breakdown below horizontal support, allowing this market to go down to the €11,000 level, and then eventually the €10,000 level. I think that the next couple of weeks will be very important for this market, as the European indices have been very sensitive to the geopolitical noise and of course the talk of trade wars. Beyond that, the economic numbers out of the European Union haven’t been the greatest lately, but over the last several years, that means that people are looking for more quantitative easing, meaning a cheap money rally. Over the next couple of weeks though, I anticipate that we get a lot of clarity.

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This article was originally posted on FX Empire

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