European share indices following the US higher – DAX forecast

Intermediate
  • Yesterday we highlighted the S&P 500 future hitting a new record high and through the psychological/option level at 3400.
  • Despite European equity averages underperforming their US counterparts in August, they have tried to play catchup in the past week.
  • The more positive tone for the European indices has been assisted by the fact that the latest “risk on” move higher in global stock indices has NOT been accompanied by US Dollar weakness/ Euro strength (EURUSD is sideways).
eurusd chart
6 Hour EURUSD Chart
  • Here we again spotlight the German benchmark, the DAX.

DAX day trade outlook: Bull theme, despite a dip

Day trade update and view

A surge higher Monday above multiple resistances and higher again overnight into Tuesday above 13208 to 13222, but holding just above our 13001/000 supports at 13007, to retain upside pressures from both the recent and earlier August, strong advance, to leave risks higher for Wednesday.

Day trade setup

  • We see an upside bias through 13125.5 for 13222; a break here aims for key 13304.5 and maybe the 13421-492.5 resistance gap.
  • But below 13007/01/00 quickly aims for 12952 and possibly opens risk down to 12791.5, even 12625.5.

DAX intermediate-term outlook

The latter July plunge below 12384.5 signalled an intermediate-term shift to a broader range seen as 11925.5 to 13304.5.

  • Upside risks: Above 13304.5 sets an intermediate-term bull trend to target 13824 and 15000.
  • Downside risks: Below 11925.5 sets an intermediate-term bear trend to target 11589.5, 10856.5 and 10159.

6 Hour DAX Chart

DAX chart

Editor in chief

Steve Miley has 29 years of financial market experience and as a seasoned expert now has many responsibilities. He is the founder, Director and Primary Analyst at The Market Chartist, the Editor-in...continued

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