The DAX Index is trading 0.56% higher on the day despite the $7.5 billion worth of tariffs placed on European imports by the United States on Friday. Today’s move pushes the price above the important resistance of 12650.
On Wednesday, the World Trade Organization (WTO) decided to allow the Trump administration to place around $7.5 billion worth of tariffs on imports coming from the European Union. The decision, implemented by the administration on Friday, includes 10% tariff on aircraft from the EU and a 25% tariff on other goods ranging from agricultural to industrial items.
“Europe is ready to retaliate, in the framework, of course, of the WTO. These decisions would have very negative consequences both from an economic and a political point of view,” warned France’s Economy Minister Bruno Le Maire.
Nevertheless, the potential trade war between the US and the EU doesn’t seem to hold back the DAX Index. The bulls have managed to push the price above the horizontal resistance of 12650, which had marked the 2019 high before the price created a new annual high of 12814 last week. In case the price action closes above this resistance zone, it would pave the way for a more significant move higher.
The next major target for the bulls is the zone around the 13000 handle, which is where the 127.2 Fibonacci extension of this year’s retracement lower is also located.