The DAX index is little changed in the futures market as investors focus on Germany’s reopening plans. In a statement yesterday, Angela Merkel said that the ongoing partial restrictions will remain until December 20. She also said that people will be required to wear masks in most situations and limit the number of meetings.
In all, restrictions are expected to end in the first quarter of 2021 since Germany will be among the first countries to start vaccinations. That’s because BioNTech is a German company and that the country has already spent billions of dollars procuring the vaccine.
The DAX index, like its other global peers is rising because of the anticipated better relations between the United States and Europe. This is because Joe Biden, judging by his past statements and his current nominees will favour more engagement with Europe. This will be a good thing for DAX companies since Trump was threatening new tariffs.
Elsewhere in Europe, the FTSE 100 index is up by 0.25% in the futures market even after a dire warning from Rishi Sunak. In a statement yesterday, the Chancellor of the exchequer said that the country was facing an economic emergency because of the virus. He also warned that the government will not hike salaries for public employees. In total, the FTSE is rising even as the British pound remains close to its monthly highs.
In the United States, the Dow Jones and Nasdaq 100 futures are up slightly. Still, we should expect low volumes from the United States today and tomorrow since the country is in a Thanksgiving holiday mode. In Asia, the Nikkei 225 and Hang Seng indexes are up by 0.90% and 0.28%, respectively.
Meanwhile, the biggest laggards today are digital currencies. Bitcoin, Ethereum, Ripple, and other cryptocurrencies have dropped sharply mostly because of profit-taking by investors. Ethereum price has fallen by 10% to $530 while BTC has lost more than 700 points.
The four-hour chart shows that the DAX index has been in a narrow range lately. It has remained between the support at €13,025 and the resistance at €13,367. As a result, the RSI has moved sideways slightly below the overbought level of 70 while the price is being supported by the 15-day and 25-day weighted moving averages.
Therefore, in the near term, I suspect that the index will remain inside this channel as traders wait for another catalyst. However, a move above the resistance at €13,367 will lead to a further upside.
