Dax Index
The DAX index is falling in the futures market as investors react to the rising yields in the United States. The index is trading at €13,950, which is slightly below this week’s high of €14,115.
DAX news: The German DAX index is falling because of the rising yields in the US as investors wait for the next stimulus deal. As shown below, the 10-year, 5-year, and 2-year treasury yields have risen to the highest level since January.
This is probably a sign that investors hope that the $1.9 trillion stimulus package will lead to higher inflation. With high inflation will come higher interest rates, which are often negative for stocks.
The DAX index is also falling ahead of key corporate earnings from leading European companies. Some of the companies to watch will be Allianz, Hermes, Danone, and Renault.
Turning to the four-hour chart, we see that the index found a strong resistance at €14,165 this week. It then dropped to a low of €13,853 and then pared the gains to the current €13,950. The index has also formed a double-top pattern whose neckline is at €13,825.
Therefore, in my view, the index will resume the upward trend, move above €14,0000, and then break-out lower. Any sharp bearish moves will be confirmed if the index manages to move below the neckline at €13,825.
