DAX30 bulls push the German index in a favorable position for a year-end rally
Source: Economic Events November 30, 2020 - Admiral Markets Forex Calendar
The last week of trading wasn't, all in all, spectacular. Most likely, it was due to the shortened trading week in US equities with "Thanksgiving" on Thursday and "Black Friday" on Friday.
But, what could clearly be seen is the drift higher in the German index, with the DAX30 trying to break above 13,300 points, out of its recent trading range.
While a dynamic break looks certainly different, it seems more and more likely that the path for a year-end rally has been paved and it's only a matter of time until we see a push up to the September highs around 13,450 points, the last stop-over on the way up to the current yearly and All Time Highat around 13,800 points.
Fundamentally, such a break higher could be triggered by different news hitting the wire, such as:
- Any news triggering "vaccine hopes"
- Any signs of further monetary stimulus from the ECB at its meeting on the 10th of December (Thursday of next week)
- There 's also news pending around a massive fiscal package from the US government, and also from European countries after the recent lockdowns, to stabilize the US/European economy
With the arrival of a fiscal package, an ultra-dovish approach not only from the ECB, but also from the FED, would follow to finance that "fresh" debt.
Technically, we should still keep an eye on the uptrend line on the hourly chart which could, once broken, trigger further selling and initiate a drop back below to the psychologically important 13,000 point-mark. However, we could still see a confirmation of a short-term top in the German DAX30 once the index drops and closes below 12,900 points.
In such a scenario, a deeper corrective move with a first target around 12,500 points becomes an option, ending hopes of a "Santa Claus rally":
Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Hourly chart (From November 06, 2020, to November 27, 2020). Accessed: November 27, 2020, at 10:00 PM GMT
Source: Admiral Markets MT5 with MT5SE Add-on DAX30 CFD Daily chart (from July 08, 2019, to November 27, 2020). Accessed: November 27, 2020, at 10:00 PM GMT. Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the DAX30 CFD 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%, and in 2019, it increased by 26.44%, meaning that in five years, it was up by 34.2%.
Check out Admiral Markets' most competitive conditions on the DAX30 CFD and start trading on the DAX30 CFD with a low 0.8 point spread offering during the main Xetra trading hours.
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