DAX
Dax index has managed to close above the 14,200 on a daily basis – a bullish breakout. The stock market index consolidated in an ascending triangle pattern for the first two months of the year, and yesterday’s breakout suggests the triangle is completed.
Curious enough, the break higher was triggered by the US futures. They reacted to the news that the US Congress has approved another round of fiscal stimulus, despite the positive economic data coming out of the United States.
Yet, what fueled the Dax index’s move higher more than the news from the United States was the weakness in the EUR/USD exchange rate. The pair, a concern for the European Central Bank (ECB) in the last months, eased close to 1.18 before finding some buyers.
The ECB meeting later in the trading week will be decisive for the stock market and for the common currency. Until then, traders will focus on technical levels and on the German index’s ability to hold above 14,200.
Bulls may want to stay on the long side and target the measured move. As such, they need a stop-loss order at 13,800 and a take profit at 15,300 to make the most of the bullish breakout seen in the Dax index.
