DAX
Dax index is on a large consolidation in the last week. The main German index hovers around the higher, in a bullish flag formation, pointing to a bullish breakout sooner rather than later. However, a bullish flag is one of the trickiest patterns to trade because the consolidation may take longer than anyone expects.
Two types of bullish flags exist – one that corrects on the horizontal and one that corrects against the main trend. Out of the two, the former is more bullish, as it points to the market pressuring against horizontal resistance. This is what the Dax index does here – it pushes against the highs.
Germany managed to get its act together, and the vaccination campaign looks stronger than ever. On the back of strong industrial numbers, the German economy will likely recover faster than thought in the second half of the year. Moreover, the news that Europe lays down the plans for one trillion borrowing in the year/years ahead, bodes well for European Union and the euro.
Bulls may want to wait for the market to break above the recent highs and to close there on a daily basis. Such a move should trigger a run for the measured move, seen well above 16k.
