DAX
The DAX index is down by 2% on a slew of negative fundamentals weighing down the index this Friday. Sanofi’s stock fell 3.1% after it said its coronavirus vaccine candidate was facing delays. A downbeat economic forecast from the European Central Bank and the possibility of extending the lockdowns in Germany are all contributing to set the tone for a bearish day on the DAX index.
Top advisor to the German Chancellor Altmaier has hinted at the lockdown being extended. Indeed, infections have tripled since the beginning of October, and 16 state premiers support an extension of lockdowns until 20 December.
The DAX index is now facing its steepest daily drop since 28 October’s 4.17% slump.
You can watch the ATFX Chief Market Strategist share his technical levels for the DAX index in the video above. This provides an ultra-short-term outlook for the DAX index.
On a broader view, the DAX completed the measured move from the bullish pennant’s break at 13453.147 resistance. A subsequent dip to 13191.155 was followed by a renewed movement to 13453.147, setting up a potential double top pattern.
Today’s price move violates the 13191.155 neckline support, meeting new support at the 13013.481 price level where previous lows of 10 November and 12/13 November are located. If the active candle closes at this level, the neckline’s breakdown is confirmed, validating the double top. This opens the door for a measured move to 12929.420, making this the next logical target. Below this level, further support comes in at 12625.628.
On the flip side, a bounce at current support retests the neckline. Further advance invalidates the bearish pattern, bringing 13346.699 into the picture as the next upside target. Further recovery on the DAX index requires a break above 13453.147, opening the door towards 13629.616.
