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Other key data releases include the Philly Fed Manufacturing Index and existing home sales data. However, these will likely play second fiddle to the labor market data.
Beyond economic data, traders should monitor tariff developments, potentially influencing market risk appetite.
Near-Term Outlook
The DAX’s trajectory will depend on central bank policies, tariff developments, and fiscal policy decisions:
- Bearish Scenario: Rising US-EU trade tensions, a Bundesrat vote against fiscal reforms, and a hawkish ECB could push the DAX below 23,000.
- Bullish Scenario: A dovish ECB stance, easing trade tensions, and parliamentary approval of fiscal reforms could drive the DAX past its record high of 23,476.
As of Thursday morning, US futures pointed to an upbeat US session, with the Nasdaq 100 mini up 130 points.
DAX Technical Indicators
Daily Chart
Despite Wednesday’s pullback, the DAX remains well above the 50-day and 200-day Exponential Moving Averages (EMAs), signaling strong bullish momentum. However, fiscal and tariff-driven volatility raises short-term downside risks.
If the DAX breaks out above 23,350, the bulls may target the record high of 23,476. A return to 23,476 could indicate a move toward 23,750.
Conversely, a DAX fall to 23,000 could bring 22,750 into sight. A break below 22,750 may enable the bears to target 22,500.
The 14-day Relative Strength Index (RSI) at 59.88 indicates the DAX may climb to the March 6 record high of 23,476 before entering overbought territory (RSI > 70).
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