The German DAX rally during the trading session on Wednesday, breaking above the €24,500 level. By doing so, the market is likely to continue to see a lot of momentum in this market, and the fact that the candlestick is bigger than the previous ones, and the fact that we had a gap previously, it suggests that we are in fact starting to see some momentum enter this market. With this being the case, any short-term pullback probably attract a certain amount of attention as the uptrend is starting to continue, and it looks like we are trying to break out of a bigger consolidation area.
Consolidation
We have been consolidating between the €23,000 level, and the €24,500 level. Now that we are breaking above the top of it, it is probably only a matter of time before we see buyers jump in and try to push this market toward the €25,000 level, which of course is a large, round, psychologically significant figure, and an area that a lot of people will probably be paying close attention to. The so-called “measured move” of the market is for a €1500 move, meaning that we could get to the €26,000 level based on the technical analysis.
If we fall from here, the 50 Day EMA sits at the €23,929 level, but is curved it to the upside and looks as if it is trying to reach €24,000 pretty quickly. Between here and there, we have a gap that obviously should offer a bit of support, and it is worth noting that during the trading session on Wednesday, a volume picked up a little bit, showing that there might be a little bit more in the way of interest in Germany, which makes sense considering that it is the bellwether for the European Union. Remember, as Germany goes, so goes the rest the European Union so even if you are trading this specific stock market, it is worth keeping an eye on.
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