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DAX30: Bulls back into the game!

JFD Brokers UUIIFXBR
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Investors will be closely watching the European Central Bank’s latest policy decision at 12:45 p.m. GMT, when it is widely expected to announce a government bond buying plan to stimulate growth. Investors fear that if the ECB does not announce a quantitative easing, or ‘QE’, Eurozone inflation prices will drop faster, remaining far below the ECB’s target of just under 2 percent.

DAX30 index is looking quite bullish on the daily chart following the aggressive break above the key resistance level of 10097 a few day ago. Technically speaking, this enabled the index to remain above the ascending trend line, which started back from the beginning of October 2014, as well as above the 50-period SMA and the 200-period SMA on the daily chart.

Bearing the above in mind, I remain bullish in relation to the German index. Therefore, a decisive break above the 10400 level could pave the way towards the psychological level of 10600. The MACD oscillator support a further rise since is moving in a bullish territory while moving above its trigger line. Furthermore, as long as the previous low holds, the channel is considered valid, since the index is printing higher highs and higher lows.

On the other hand, if the bulls fail to push the price further up, I would expect extensions towards the 9900 area, which includes the ascending trend line, as well as the 200-period SMA. A clear break below that level, would signal the completion of the correction. I would start looking for trend reversal signals as soon as the ascending trend line and the 9850 level are penetrated.

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