FRANKFURT (dpa-AFX) - Following the long weekend, the Dax is poised to build on Thursday's strong performance. Broker IG signaled a 0.2 percent gain for the German benchmark index to 24,334 points roughly three hours ahead of the Xetra open. Last Thursday, the Dax significantly brightened its technical outlook with a massive intraday reversal. After opening at a session low of 23,715 points, it rallied nearly 2.5 percent to close at its daily high.
In doing so, the Dax formed a 'bullish engulfing' pattern on the charts. 'Such a formation essentially represents nothing less than a shift in sentiment,' wrote technical analyst Christoph Geyer in his weekend commentary. However, he noted that the preceding downtrend was not pronounced enough to suggest a major breakout is imminent. Nevertheless, a breach of the recent resistance zone appears to be in the making. This zone extends from the psychological 24,500-point mark to nearly 24,800 points.
The news flow remains tense, however, and not just regarding the conflict in the Middle East. Expressing his dissatisfaction with Europe and particularly Germany, U.S. President Trump announced a sharp hike in U.S. tariffs on EU vehicles via his Truth Social platform on Friday. The EU Commission is reserving the right to take retaliatory measures should Trump follow through on his announcement./ag/zb
