At the time of writing, the DAX index was up by 0.32% on the day, and the price was trying to overcome the resistance level provided by the September 17 low of 12302. The move higher follows yesterday’s sharp rise in US stock market indices as the White house released a transcript of President’s Trump’s phone call with Ukraine’s President, Volodymyr Zelensky.
As there are no clear rules to what an impeachment offense is, traders and investors appear to have become less worried about an impeachment following the release of the transcript. Also, two-thirds of the Senate would need to vote against Trump for him to be removed from office, and this was quite a big hurdle to begin with as the Republican’s control the Senate.
The DAX index mood was also boosted by comments from China’s Commerce of Ministry. They said that they welcome US firms to invest in China, and that they will protect their legal rights, and that they hope to meet the US half-way and by finding a win-win solution, amongst other headlines. The comments go in the same spirit of the last few months.
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Technically, the DAX index is trying to trade back into its 12302 to 12500 range, however, the price trend remains downwards below the 12401.6 intraday high formed on September 23. If the price manages to remain below the 12401.6 high, the DAX index might resume its downtrend and could try to reach the target of the 12302 to 12500 range and rectangle pattern, at 12101. Beyond the rectangle pattern target, the 38.20% correction level at 12013 is the next support level and a potential target. The 38.2% correction level is a Fibonacci level derived from the March 25 low of 11266.8 to the September high at 12500.5 range.
If the DAX index manages to take out the 12401.6 level, then traders might try to reach the next high, the September 13 high at 12500.Download our latest quarterly market outlook for our longer-term trade ideas.
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