Potential signal:
- I am selling on a daily close below 23,000 with a stop loss at 23,300.
- I would aim for 22,000 or lower.
The German index initially tried to gap higher during the trading session on Wednesday but initially tried to rally and then gave back quite a bit of the momentum in order to fall toward the lows of the previous candlestick, and at this point in time it looks like Germany is going to continue to sink. This does not surprise me, as there are 150,000 planned the layoffs in the industrial sector in Germany, which to put it in perspective, it would be the same as 500,000 in the United States. It’s a big number.
Top Forex Brokers
Global Economy
The global economy continues to look a little bit interesting at the moment, because quite frankly, if the United States starts to slow down, there’s literally no chance that the rest of the world avoids having major problem. I hear this every time there is a slowdown in the United States about how “the US dollar is about to lose the world’s reserve currency status, and it’s the beginning of the end of the United States.” I hear this every couple of years, and by the time the dust settles, the rest of the world, particularly Europe, takes it on the chin.
Ultimately, this is a market that is going to be representative of the rest of the European Union. While I’m not quite ready to call it a trend change yet, I am watching the €23,000 level very closely. If we break significantly below there, I think the DAX has much further to fall. Ultimately, the FOMC statement will have a lot to do with where we go next, because quite frankly, if the Federal Reserve starts to sound a bit concerned, that will have everybody running for safety. Furthermore, the German economy already looks like it’s in trouble, so I am leaning toward the downside at the moment, but we have not broken enough support for me to get into a short position.
Conversely, if we were to turn around and break above the 50 Day EMA, then we could see a move to the €24,500 level, which had been a significant ceiling over the last couple of months. This is possible, but at this point in time I think DAX needs to prove itself before we see anything like that happen.
Ready to trade our daily forex forecast? We’ve shortlisted the best Forex brokers for CFD trading in the industry for you.