I wrote many articles here about the Dax index and how it may have formed numerous topping formations on the lower timeframes. However, no matter what causes an eventual pullback, bulls step in, and the index jumps close to the highs. Therefore, the next logical thing to do is to move on to a bigger timeframe and see the picture from a different perspective.
On the daily chart, the Dax index inversed head and shoulders pattern may act as a continuation pattern. It often does so, only that on this timeframe, the measured move points to 16,000 and beyond as a target.
Europe prepares to step up the vaccination efforts. The European Commission expressed its desire that more than 70% of the adult population be vaccinated by the end of the summer, and Merkel in Germany said that this is an achievable target.
But something else fuels the Dax index – a lower Euro across the board. The EUR/USD exchange rate eased close to 1.20, and that fuels the rally in risk assets.
Dax Index Technical Analysis
Bulls may want to stay on the long side for a break of the neckline of the pattern and place a take profit at the 16,000 level. The invalidation of this bullish setup comes on a move below the previous higher low in the right shoulder.
Dow Jones Daily Chart