DAX
Dax index appears to have formed a double top pattern at the 14,150 level. The leading German index failed to hold above 14,000 despite trying to do so all day yesterday.
On the one hand, the bullishness in the Dow Jones helped the Dax, but the weakness in the tech sector dragged the equities lower toward the end of the American session. In Europe, the vaccination campaign remains a total fiasco, with pressure mounting on Brussels to step-up both communication and the vaccine rollout.
Germany announced its plan for ending the lockdown phase, but it still remains far away in the future. From an economic point of view, the ZEW indicator yesterday revealed increased optimism from the German business community despite the country remaining in lockdown mode for now.
For the Dax index, it matters most what the Dow Jones in the United States does rather than local news. Therefore, all eyes today should be on the Fed’s Powell testimony.
A double top pattern has the shape of the letter M. By the time the price breaks below the lowest point in the pattern, the market participants focus on the measured move. Bears may want to sell a move below 13,800 with a stop at 14,100 and a take profit at 13,400.
