- The German index continues to attract strong inflows, with traders favoring the DAX as a primary gateway into Europe.
- While short-term resistance and pullbacks appear likely, the broader range suggests steady participation and potential for a major breakout.
The German index rallied again during the trading session on Wednesday, and we continue to see a lot of money flowing into the DAX. That being said, I think you also have to keep in mind that this is a market that is the gateway to Europe. What I mean by that is that if traders are looking to put money to work in the European Union, Germany is almost always the first play they take.
Top Forex Brokers
The 50-day EMA sits just above and offers a bit of resistance. And I think that's your target for the short term. Nonetheless, we are a little extended over the last couple of days, so a short-term pullback is likely, but that to me only offers a buying opportunity. It's worth noting that we were in a range between 24,500 euros at the top and 23,000 euros at the bottom.
Key Technical Levels Supporting the Range
The 200-day EMA currently sits just above the 23,000 euro level. So, I think that opens up the possibility of a hard floor in the market. Ultimately, I think we will continue to bounce around in this range. But overall, it looks like willing participants are out there jumping in and buying German stocks. I think that continues to be the case. But whether or not we can break out to the upside remains to be seen, as the area right around the 24,500 euros level has been difficult to break above. Volume is okay, it's generally normal, from what I can see. And therefore, I wouldn't worry too much about that. But as we are in this range and have been in since May, it's going to take a real push to break out of it. If and when we do, though, it could lead to a very big move.
Ready to trade our stock market forecast and analysis? Here are the best CFD stocks brokers to choose from.