DAX
The Fed is behind us, and the Dax index is poised to open at the highs. While we may see a correction as it tries to follow on the U.S. stock indices futures, the Dax is in a bullish channel, and it is likely to find support at dynamic levels.
The FOMC Statement and the press conference that followed reinforced the Fed’s willingness to let the yields rising. Higher yields in the U.S. trigger unwanted tightening conditions in the Euro area, forcing the ECB to increase the pace of asset purchases. Remember that higher yields mean lower bond prices, and that may appeal to the ECB in light of its new commitment of increasing the pace of bond buying under the PEPP program.
In Europe, Germany, France, and other European nations entered the third wave of the pandemic. Italy is in national lockdown again, France registered over 35k cases of new infections yesterday, the vaccination pace decreased – all these should put pressure on the local currency but should help equities in the medium to long term.
Dax is in a rising trend obvious on the 4h chart. Bulls may want to buy on a dip to the middle point of the channel and even add on the main support lower. Invalidation comes on a break below 13,800 while 15,500 or more is a fair target.
