European stock markets are advancing this Monday as the feasibility of a state aid to airlines increases. Likewise, the financial sector also became infected by stock market optimism as individual governments have announced that they will soon ease the virus blockade measures.
The German reference index DAX 30 advances 124.6 pts or 1.19%, climbing up to 10.576.5 pts, while the Pan-European index Eurostoxx 50 raises 27.4 pts or 0.97% reaching 2.860.8 sts.
The German index that groups the 30 most capitalized companies, during this year, accumulates a decline of 19.43% (YTD.) Likewise, DAX 30 advances 32.91% from the massive sell-off that occurred between February and March that led it to collapse to 7,957.6 pts.
The German benchmark, in Elliott's short-term perspective, in his 2-hour graph, shows the advance in a non-directional sequence corresponding to a contractive triangle.
After DAX 30 reached the lowest level of 2020 in the 7,957.6 sts on March 19, the German index completed an expanding diagonal ending pattern in the 8,247.6 sts on March 23. In this way, DAX 30 finished a first structural series corresponding to the wave (A) of intermediate degree labeled in blue.
Once the blue wave (A) was completed, DAX 30 began to develop a bullish sequence corresponding to wave (B) in blue, which is still in progress.
Currently, the German benchmark is moving in a lateral sequence that obeys an internal structure of a contractive triangle, which belongs to the Minor degree labeled in green wave B.
Considering that the price action is surpassing the upper line that joins the end of waves ((b) and ((d)) of Minute degree in black, we can conclude that DAX 30 is initiating the wave C in green.
According to the textbook, in a corrective pattern divided into an internal sequence of three waves, the wave C must contain five inner segments.
On the other hand, wave C may be similar to an impulsive structure, or it may develop as an ending diagonal pattern in where its internal waves are overlapped one each other.
In conclusion, considering that DAX 30 should develop a bullish sequence subdivided in a five-wave structure corresponding to wave C of Minor degree, which should lead to new highs, our preferred short-term positioning remains on the bullish side.
However, in the long-term, considering that the following path corresponds to a bearish wave (C) of Intermediate degree in blue, our long-term positioning keeps neutral, expecting for bearish indication.
Risk Warning: CFD and Spot Forex trading both come with a high degree of risk. You must be prepared to sustain a total loss of any funds deposited with us, as well as any additional losses, charges, or other costs we incur in recovering any payment from you. Given the possibility of losing more than your entire investment, speculation in certain investments should only be conducted with risk capital funds that if lost will not significantly affect your personal or institution’s financial well-being. Before deciding to trade the products offered by us, you should carefully consider your objectives, financial situation, needs and level of experience. You should also be aware of all the risks associated with trading on margin.
Recommended Content
Editors’ Picks
AUD/USD faces the next hurdle at 0.6400
AUD/USD rose markedly and approached the key 0.6400 hurdle at the beginning of the week, always in response to rising weakness in the US Dollar and hopes of fresh stimulus in China.
EUR/USD keeps the upside target at 1.1000
EUR/USD extended further Friday’s recovery and traded at shouting distance from the YTD peaks near 1.0950 in response to increased selling pressure in the Greenback and the improved political scenario in Germany.
Gold consolidates around $3,000 ahead of Fed
Gold prices has started the week on a positive tone and maintains their trade around the key $3,000 mark per troy ounce on the back of the modest pullback in the Greenback and mixed US yields across the curve,
Crypto markets could gain $1 trillion as Gold price reaches $3,000: Tokenized-Gold expert explains
Tokenized-Gold assets hit a $1.8 billion market cap on Monday after the Gold (XAU) price marked new all-time highs above $3,000 per troy ounce. In an exclusive interview with FXStreet, RAAC CEO Kevin Rusher explains how tokenized Gold assets could impact the next crypto market recovery phase.
Five Fundamentals for the week: Fed leads central bank parade as uncertainty remains extreme Premium
Central bank bonanza – perhaps its is not as exciting as comments from the White House, but central banks still have sway. They have a chance to share insights about the impact of tariffs, especially when they come from the world's most powerful central bank, the Fed.
The Best brokers to trade EUR/USD
SPONSORED Discover the top brokers for trading EUR/USD in 2025. Our list features brokers with competitive spreads, fast execution, and powerful platforms. Whether you're a beginner or an expert, find the right partner to navigate the dynamic Forex market.