Market Analysis - DAX30 CFD fails to break above 11,000 – Is the Brexit vote a bullish driver?

In the DAX30 CFD there are currently two significant regions on the up, and respectively on the downside, and many traders may wonder which level will break first: 10,800 or 11,000 points. The DAX 30 CFD did not break sustainably below 10,800 points on Monday, but experienced a strong start on Tuesday, and chances seemed good that the bulls would start a serious attempt to break above 11,000 points. Well, to cut a long story short, the DAX30 CFD failed in spectacular style, and dropped back towards 10,800 points.

Source: Economic Events 16 January 2019 - Admiral Markets' Forex Calendar

Even at the time of writing, the DAX30 CFD is now trading nearly in the middle of its trading range between 10,800 and 11,000 points, and it seems to be a coinflip situation in regards to which direction the breakout will finally occur. There seems to be a higher than 50% chance that the reason for the failed break on the upside yesterday morning can be found around the uncertainty of the Brexit vote in the UK parliament.

Now after yesterday evening it became clear that UK Prime Minister Theresa May's Brexit deal failed, the initial rumours suggest that the EU is not only willing to give GB more time (= delay of Article 50), but the reactions from EU politicians like Tusk or Juncker, especially after the comments from Draghi yesterday in front of the EU parliament in Strasbourg (comments such as: "recent economic developments have been weaker than expected"), indicate that the EU will possibly make one or two steps towards Theresa May in the negotiations between the EU and GB in the upcoming days. With this outlook in mind, another attempt to break above 11,000 points in the DAX30 CFD seems likely in the coming days.

Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD chart (between 18 October 2017 to 15 January 2019). Accessed: 15 January 2019 at 10:00 PM GMT - Please note: Past performance is not a reliable indicator of future results, or future performance - In 2014, the value of the DAX30 CFD increased by 2.65%, in 2015, it increased by 9.56%, in 2016 it increased by 6.87%, in 2017 it increased by 12.51%, in 2018 it fell by 18.26%, meaning that after five years, it was up by 10.5%.

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