The DAX index is in a tight range today as traders digest the latest news on Brexit, German lockdowns, US stimulus, and FDA authorisation of Pfizer’s vaccine. The index is trading at €13,183, which is slightly below the important resistance at €13,457.
What is happening? There are several moving parts on the DAX index today. First, the EU and the UK agreed to continue Brexit negotiations. This prevented the immediate chances of a no-deal Brexit, which will have a negative impact on companies in the DAX.
Second, in a statement yesterday, Angela Merkel announced new strict lockdowns as the number of new infections continue to rise. The new lockdowns will affect schools, stores, and day care centres, which will close before Christmas.
What about US stimulus? Third, on a positive sign, stimulus talks in the United States are advancing, which is a positive thing for German companies in the DAX index. That’s because most of them do a lot of business in the United States. Most importantly, it is reacting to the roll-out of a Covid vaccine in the US.
The top DAX components to watch out for today are automakers like Daimler, BMW, and Volkswagen. Other firms will be Deutsche Bank, Bayer, and Continental.
DAX index forecast
What is the DAX index forecast? The German DAX is trading at €13,183, which is slightly above Friday’s low of €13,000. On the four-hour chart, the index is below the 25-day and 15-day exponential moving averages. The two are also about to have a death cross. Notably, the index has already formed a double-top pattern at €13,457. Therefore, there is a high possibility that the index will resume the downward trend and retest the support at €13,000.
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DAX technical chart
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