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DAX Forecast: DAX Continues to Test a Major Support Level – 13 July 2022

In the time being, this the DAX will continue to be noisy, and probably a bit soft.

The DAX has pulled back a bit during the trading session after gapping lower, filling the gap, and then dropping again before bouncing in the late hours of Tuesday. At this point, it looks like the EUR12,500 level continues to see a lot of support, as it had been both support and resistance multiple times in the past.

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If the market were to turn around and retake the EUR13,000 level, then it’s possible that we could go to the EUR13,500 level. The 200 Day EMA is sitting in that area, and there is also a gap that has been formed in the same general vicinity. The 50 Day EMA is diving below the EUR14,500 level and looks very likely to continue to attract a lot of attention even if we do get to that upside.

The alternate scenario is that we break down below the hammer that we formed on the Monday session, which would be a very negative turn of events. At that point, the EUR11,500 level is likely to be the initial target. After that, we could be looking at a move to the EUR11,000 level. Obviously, Germany has a whole list of problems right now that it has to deal with, not the least of which would be the fact that Germany does not have enough energy. As long as the Germans and the Russians are fighting a proxy war in Ukraine, it is difficult to imagine that their energy situation is going to be easy.

I think at best, we probably have a very choppy market ahead of us, as we try to confirm buyers in this region. If we were to break above the 200 Day EMA, that would be a good sign, but we still need to break above the EUR14,500 level to make any real statement to the upside. It’s also probably worth noting that we are near the 50% Fibonacci retracement level, which is an area that tends to attract a lot of attention as well.

All things being equal, this is a market that I do not like the idea of buying, but there are a couple of levels that may extend previously that I would have to consider. In the time being, this the DAX will continue to be noisy, and probably a bit soft.

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