European stock are surging and the DAX busting some levels

US stocks took the message from the FOMC as bullish. They see the Fed ready to go in terms of the economy doing well and that's an important interpretation. The path of rates will also be kept low and gradual and that keeps the cheap money in place. Stocks have been thriving on that for years now

Europe is playing catch up today and there's also the added benefit of possible further action from the ECB

Earlier this month we (hopefully) helped out a ForexLive reader who had some questions about what to do with his DAX long from way down below. Unsurprisingly the community stepped forward to offer plenty of good advice.

The main sticky point was what to do with the trade around 11000. The general consensus was that it would be sensible to take some off the table if we held below or keep an eye on the lower levels and play it with trailing stops, or add on dips

The price held below for four days before taking a look above. That didn't last and we then held below again, and dipped and found some support around 1.0600

DAX daily chart

Obviously a big part of the drop was due to the French tragedy but the subsequent rebound still held below the 11k mark.

And now we have the break. We've opened above 11k and the April downtrend, which in itself is a very bullish signal. We now face resistance against the mid-August highs at 11150. And that's where we've topped out so far today

DAX daily chart

So where do we go from here?

The mechanics of most trades remain the same. Just as I/we highlighted the levels to watch when we were below 11k, so we now shift up and highlight the levels now we've broken 11k

The big support level is now obviously 11000 but our first point becomes the trendline at 11050. At only 50 pips between them it gives a good opportunity for support to build there in protection of 11000

If we break above 11150 then the August and July highs become the next targets, and 11150 may then become support

The questions we asked back on the 2nd are the same questions we ask now. Will we or won't we break the levels we've highlighted? It's a tighter range but the outcomes will always be the same, we do or we don't

For those that aren't in the trade and are waiting for the dips, the broken levels below define your dip entry points, and also your exit points if they fail

We don't need to guess where the price is going, we just need to let it do the talking