Coronavirus vaccine optimism is outweighing tighter restrictions, and this is helping European markets higher this Tuesday. The DAX Index is up 0.72% presently as it shook off concerns expressed by the Robert Koch Institute on the coronavirus epidemic in Germany, choosing to find solace in the projections of Morgan Stanley and the German Health Minister’s comments.
The Robert Koch Institute (RKI) indicated in a recent report that Germany’s pandemic situation is at its worst levels yet. However, Morgan Stanley says its European equity strategy team is bullish into 2021 as it expects the region to transition into being a “COVID winner”.
Reuters also quotes Germany’s Health Minister Jens Spahn saying that the country hoped to “start COVID-19 vaccination before the end of the year,” despite lamenting its high death and infection rates.
Technical Levels to Watch
The DAX tested resistance at 13346.699 but failed to advance beyond this point. It still maintains a bullish bias for the day. A break above 13346.699 allows the DAX to run to the 13453.147 resistance (highs of 30 November and 9 December). Advance beyond this point towards the 13629.616 price target closes the gap of 24 February and sends the index to the pre-pandemic levels.
On the other hand, rejection at the current resistance sends the DAX index towards the 13191.155 support. A decline below this level sets up a retest opportunity of the 13013.481 support level. 12929.420 lines up as an additional support target.
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DAX Index Daily Chart
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