Dax Index
Dax Index continues its bullish run ever since it broke higher from a triangle that acted as a reversal pattern. The 14,100 level is pivotal, and a break and close above the level should trigger more stops on the index’s way to the measured move of a pennant formation close to 14,600.
At the same time as the Dax is pressuring the highs, the Euro is falling across the board. It lost ground against the dollar (about three-hundred pips since January) but also against the JPY and the GBP. Europe’s economic troubles due to the mishandling of the pandemic and the inability to secure vaccines for its population in a timely manner weigh on the common currency. Also, inflation reached a five-year high yesterday, as shown by the CPI Flash Estimate. Effectively, it means pressures on the currency as inflation moves higher.
The technical picture looks appealing enough for bulls. Aggressive bulls may want to trade the current pennant formation and stay long for the measured move. Conservative bulls may want to wait for a close above the 14,100 before going long. In both cases, a move below the lowest point in the pennant should be the stop, while the absolute invalidation area is the apex of the previous triangle that acted as a reversal pattern.
