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Beyond the inflation data, traders should watch tariff developments and FOMC members’ reactions for further monetary policy clues.
Near-Term Outlook
The DAX’s performance hinges on inflation data and central bank forward guidance.
- Softer inflation and a more dovish Fed could push the DAX toward 22,500.
- Rising inflation and a more hawkish Fed rate path may pressure rate-sensitive German stocks, potentially pulling the Index below 21,750.
Additionally, the DAX remains exposed to US trade policy. Sweeping tariffs on EU goods or an escalation in the US-China trade war could trigger a flight to safety, pressuring the DAX.
As of Wednesday morning, futures signaled a positive start to the European session. DAX futures were up 69 points, while the Nasdaq 100 mini was flat.
DAX Technical Indicators
Daily Chart
Optimism about the US and the EU avoiding a trade war and aggressive ECB rate cuts remain crucial to key indicators. After a positive start to the week, the DAX sits well above the 50-day and 200-day Exponential Moving Averages (EMAs). The EMAs confirm bullish price trends.
A breakout above the February 11 record high of 22,046 could signal a move toward 22,150. A break above 22,150 may bring the 22,350 level into play.
Conversely, if the DAX drops below 22,000, it could allow the bears to target 21,500, a crucial support level.
With the 14-day Relative Strength Index (RSI) at 73.69, the DAX remains in overbought territory (above 70 RSI). Selling pressure could intensify at the record high of 22,046.
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