DAX is trying to break above the 10,000 level

It has been a very bullish week for the German DAX index as the German regulator Bafin banned short-selling. DAX is now 20% higher on the week and is trying to break above the critical psychological level of 10,000 EUR.

If bulls managed to push the index back above this resistance, we could see another rally toward 10,200 EUR, where the 38.2% Fibonacci retracement level is located. That is usually one of the most-watched resistances when any market is trying to recover from a sell-off. 

So, if the rally continues above this Fibo retracement level, it might indicate that the decline could be over, at least temporarily. In this case, the next level to watch will be at around 10,900 EUR.

However, if the current rally falters, we could see a quick decline to 9,500 EUR, which seems to be significant short-term support. Another target for bears could then be at around 9,360 EUR.

Volatility continues to be extreme, and the current rally could still be only a correction in a bearish trend. If this is true, we should see a new cycle low over the next days or weeks.



 
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