Fundamental Analysis
Germany announced more restrictive measures yesterday as the lawmakers are trying to bring the coronavirus situation under control. The fear among investors and traders is that we may see another national lockdown. There is no doubt that the third wave of national lockdown is already here as the United Kingdom went under this yesterday. Prior to this, Ireland also announced a national lockdown, and some of the Scandinavian countries are also looking at this option very closely. Investors are concerned that these lockdowns are coming at different times, and they are very much likely to hinder economic recovery.
Technical Analysis
On the technical side, the Dax index is trading above the 50, 100, and 200-day SMA on the daily time frame. This shows that the bulls are still very much in control of the price. In addition to this, we also have the 50-day SMA crossing back above the 100-day SMA, which is a massive bull signal. It is important to keep in mind that the RSI is trading near the overbought zone, which means that any further bullish bets should be taken with some caution as the market is expected to retrace from its current price level.
