A trading day that has seen a scarcity of market-moving data has left price activity on the DAX index floundering in a low-volume environment. However, the DAX index finds itself slightly lower as Brexit negotiations have been suspended due to the coronavirus infection of one of the negotiators on the EU side. This was made known by the Chief Brexit Negotiator of the European Union, Michel Barnier on Thursday. However, Barnier’s UK counterpart David Frost has indicated that he still maintains contact with Barnier.
The sudden cancellation of Thursday’s summit between both parties sparked rumours of new rows between both sides, both Barnier’s announcement has clarified the situation.
Meanwhile, comments from the ECB Chair Christine Lagarde about the PEPP at the ECON Committee of the European Parliament did not move the markets. The DAX index is presently trading a little below its opening price and is down by 0.52%.
Technical Levels to Watch
The daily chart of the DAX index shows that the recent price activity is evolving into a
bullish pennant pattern. Today’s price candle bounced off the pennant’s lower border. This move puts the upper border at the 13191.155 resistance level at risk. A breakout at that point allows the 21 February low and 3 September high to come into view as the potential upside target. Such a price move also covers the bearish gap that precipitated the pandemic-related slump in the DAX index. Above this level, the 22 January high at 13629.616 and the 2020 high at 13789.00 (seen on 19 February 2020) form the additional upside targets.
On the other hand, only a reversal from current levels that compromise the pennant’s lower edge will invalidate this pattern and open the pathway towards 12882.686. Below this area, 12607.948 and 12383.716 (6 November low and 50% retracement from the swing of 30 October to 9 November) line up as additional targets to the south with potential.