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However, retail sales trends can also impact inflation and the Fed’s policy outlook. Economists forecast retail sales to rise 0.6% month-on-month in December, down slightly from November’s 0.7% increase. Higher-than-expected figures could fuel demand-driven inflation, potentially delaying Fed rate cuts. Conversely, weaker data may support bets on the first half of the 2025 Fed rate cut.
Other stats include the Philly Fed Manufacturing Index and NAHB Housing Market Index data. However, these will likely play second fiddle to the labor market and retail sales reports.
Near-Term Outlook
The DAX’s near-term trend hinges on US economic data, central bank forward guidance, and US tariff developments. Expectations of a more hawkish Fed rate path or US tariff threats could pull the DAX toward 20,000. However, weaker data and the absence of tariff-related news could drive the DAX to new highs on central bank rate cut expectations.
As of Thursday morning, the Nasdaq-mini futures jumped 155 points, driving early demand for DAX-listed stocks.
DAX Technical Indicators
Daily Chart
Following Wednesday’s breakout, the DAX remains well above the 50-day and 200-day Exponential Moving Averages (EMAs), sending bullish price signals.
If the DAX returns to Thursday morning’s record high of 20,675, the Index could target 20,750 next. A break above 20,750 would bring 21,000 into sight.
Conversely, a DAX break below 20,500 could signal a drop toward 20,000. A fall through 20,000 would bring the 50-day EMA into play.
With the 14-day Relative Strength Index (RSI) at 67.47, the DAX could target 20,675 before entering overbought territory (RSI higher than 70).
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