- Germany plunged during trading on Friday, as we have seen the fears of an increasing trade war between the United States and China not, lot of risk appetite out of the markets. All things being equal, this is a market that I think continues to see a lot of concerns about whether or not the situation gets worse between the United States and the Chinese, which could have a major influence on the Germans as well as they have to deal with a lot of volatility due to the fact that the Germans are such major exporters to the rest of the world.
Technical Analysis
The technical analysis for this market looks very bullish until Friday, as we were in the middle of breaking out to the upside. The size of the candlestick for the Friday session puts a lot of ugly pressure on this market, but at this point in time we could see a bit of follow-through due to the intensity of this move. Ultimately, this is a market that has been very noisy, and ultimately after that, I would have to look at the 50 Day EMA as a potential support level. Any bounce from there could be a nice buying opportunity, perhaps an attempt to get back to the €24,500 level, an area that’s been important a couple of times.
On the other hand, if we were to break down below the 50 Day EMA, then it’s possible that we could see this market really start to break down from there, perhaps reaching down to the €23,000 level. That’s an area that had previously been major support, and the 200 Day EMA is racing toward it. Because of this, we could see the market really start to see that as a massive floor, but I also recognize that there is a lot of time between now and when we get there, so with that being said, I think the first signs of a bounce and cooling of trade tensions probably sends the DAX back to the upside.
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