DAX30 consolidating between 12,200 and 12,500 – bullish breakout ahead?

By Admiral Markets

Source: Economic Events June 22, 2020 – Admiral Markets’ Forex Calendar

After a weak start into the last week of trading, the Fed helped the DAX30 push back above 12,000 points last Monday. Over the last days, the German index has stabilised between 12,170/200 and 12,450/500 points.

The announcement that the Fed is to begin buying a broad portfolio of US corporate bonds and Equities, intending to further narrow the gap in US central bank buying, underlines once again why traders shouldn’t “fight the Fed”, we consider chances of a bullish breakout elevated.

This breakout activates a projected target around 12,750 and above, around 12,900 points in the coming days.

Still, it needs to be seen whether Equities can continue to trade higher given the fact that the only bullish driver seems to be central bank liquidity.

And with rising fears around a second wave Coronavirus (Beijing started to once again close schools last Tuesday, while City Government raised their COVID-19 Emergency Response Level from III to II), markets could be hit by broader selling pressure again in the days to come.

That said, the technical main focus on the downside if we get to see a break below 12,170/200 points would initially be found on the projected and psychologically relevant region around 12,000 points, a stint lower activates the region around 11,800 points:

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Hourly chart (between June 2, 2020, to June 19, 2020). Accessed: June 19, 2020, at 10:00pm GMT

Source: Admiral Markets MT5 with MT5-SE Add-on DAX30 CFD Daily chart (between March 6, 2019, to June 19, 2020). Accessed: June 19, 2020, at 10:00pm 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%, in 2019, it increased by 26.44% meaning that after five years, it was up by 34.2%.

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