DAX Having a Difficult Time Catching a Bid, Seen As EUR Positive

INDEX:DAX   DAX Stock Index
There has been a clean inverse relationship in the DAX             Stock Index and the EURUSD             . This means that a top in the DAX             has correlated with a low in the EURUSD             . Since we've traded lower on the DAX             from the mid-March & mid-April highs, EURUSD             has pushed higher. If DAX             makes another move lower, that would favor a push higher in EURUSD             .

A move higher in EURUSD             is highly unpopular as shown via DailyFX's Speculative Sentiment Index or SSI             . The ratio of long to short positions in the EURUSD             currently stands at -2.01 as 33% of traders are long. From a contrarian perspective, this favors a push higher in EURUSD             and if the inverse relationship holds, then we'd also expect a leg lower in the DAX             .

Also, an equivalent decline of the 2H 2014 in the DAX             from the Mid-March / Mid-April tops would take the DAX             down around 10,327. This is roughly a few hundred points north of a internal resistance turned support point from the Dec             8th, 2014 high when EURJPY             peaked.

Lower high of 11,926 seen as critical resistance and a break above that level would favor EUR lower pleasing many retail traders.
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