DAX index
Dax index is on a tear higher. Ever since the US elections ended, the Dax followed the US equities higher. After that, the positive vaccine news was responsible for yet another leg higher in the index.
At this point, it consolidates just below the 2020 highs. However, in doing so, it shows bullish signs. First, the consolidation forms on the horizontal. Second, it follows a vertical rise. Therefore, this may easily turn out to be a bullish flag with a measured move pointing beyond the 15,000 level.
So far, the Dax index moved higher on the back of a lower USD. The logic behind the statement is that a lower USD triggered higher US stocks. In turn, higher US stocks triggered a higher Dax index.
However, this may easily change. The ECB is expected to come in December and further ease the monetary conditions. If that will be a game-changer for the Euro, it may trigger the breakout out of the bullish flag.
To trade the flag, bulls may want to wait for a break above 13,600 before going long for 15,000 while having a stop at 12,600.
