• I have been closely monitoring the upward trend line that is important for this index for several months now.
• We touched on it on Friday morning, but I also want to point out that there is a lot of support underneath, especially around the €18,000 level.
• In other words, I think there are many factors at play here that could completely turn the DAX around.

That said, this is also an index that has been sold off quite aggressively in recent days, and while I have a bias towards this index, I will be the first to admit that it has been very difficult to maintain a position. Furthermore, we have seen a lot of ugliness in the United States, mainly due to the fact that there has been a lot of stock rotation. It is possible that we could see that happen in Germany as well, which means that perhaps some of the larger companies are being passed over for smaller ones.

Germany is leading the way

Remember, Germany is ahead of the rest of the European Union, so whether you trade the DAX or not, this is an index that you should pay attention to. This is a market that represents the largest economy in the European Union, and of course the European Union is a bit of a mass at the moment. However, if the Euro starts to fall in value, it is possible that we will see the text as a beneficiary, as people start to think about the idea that exports are getting cheaper.

If we can reverse and retake the 50-Day EMA, then it is possible that the market can move towards the €18,650 level. That is an area that has been important on multiple occasions, so if we were to break above that, that would be a very positive sign. Ultimately, I think the only thing we need to continue to watch closely is whether or not stocks in general move higher, because if that happens, most indices globally will move in the same general direction.

Ready to trade our daily forex forecast? We have selected the best forex brokers for CFD trading in the industry for you.