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Stronger-than-expected US data could weigh on global risk sentiment, pressuring the DAX.
Near-Term Outlook
The DAX’s near-term trajectory hinges on Friday’s private sector PMI data.
- Increasing private sector activity, rising employment, and higher prices could reduce expectations for ECB and Fed rate cuts, which may pressure equities and pull the DAX toward 22,500.
- Weaker private sector activity and softer price pressures may support more accommodative monetary policies, pushing the DAX above 23,000.
Beyond the data, geopolitical risks and trade developments remain key drivers.
- An escalation in US-EU trade tensions could weigh on the DAX, while signs of de-escalation may drive the Index to record highs.
- Progress in Ukraine peace talks and increased EU defense spending could offset potential trade tariffs risks.
As of Tuesday morning, US futures pointed to a positive session, with the Nasdaq 100 mini rising 113 points.
DAX Technical Indicators
Daily Chart
After Monday’s rally, the DAX sits well above the 50-day and 200-day Exponential Moving Averages (EMAs), sending bullish price signals.
If the DAX surpasses this morning’s record high of 22,851, it could move toward 23,000. A break above 23,000 may bring 23,150 into sight.
Conversely, a DAX drop to 22,500 could allow the bears to target 22,150 next.
With the 14-day Relative Strength Index (RSI) at 80.16, the DAX remains in overbought territory (RSI higher than 70). Selling pressure may intensify if the DAX approaches the key resistance level of 22,851.
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