DAX index
The German Dax index followed on the Dow Jones and Nasdaq 100 footsteps and retraced from the highs. While the US indices did make new all-time highs after last Friday’s NFP, the Dax index struggles at the 15,400 area.
In fact, a close look at the recent month’s price action reveals that the Dax may have formed a toppish formation – either a double or a triple top pattern. The 15,400, therefore, is key to future price action, and the recent rejection suggests that the market participants may want to push for the pattern’s measured move.
The EU economic projections released today revealed that the bloc would reach its pre-pandemic GDP growth levels somewhere toward the end of 2022. This is far behind the United States, but it reflects the way the monetary and fiscal policy was deployed in Europe – sluggish and with a lag.
Technical traders should consider that a move above 15,400 is bullish for the Dax. In fact, even the entire consolidation for the month of April is bullish, should the price have the strength to make a new high. Therefore, bears may go short but only with a stop at 15,400. The measured move points to 14,200, thus offering a good incentive from a risk-reward perspective.
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