German 40 (DAX) Price Forecast: Tech and Bank Gains Drive Near €17,900 Peak
The German 40 (DAX) has been showing bullish momentum and hit the intraday high at the 17,900 level. The German stock market experienced...
The German 40 (DAX) has been showing bullish momentum and hit the intraday high at the 17,900 level. The German stock market experienced mixed performance with record highs driven by gains in the technology and banking sectors, while auto stocks declined due to downward growth forecasts.
However, the DAX index’s performance was heavily influenced by a combination of domestic and international factors including positive German industrial production data, coupled with ECB rate cut expectations. These have bolstered investor confidence despite challenges in the auto sector and Moody’s downgrade of German banks.
On the international front, anticipation of US economic data and signals from the Federal Reserve regarding potential rate cuts have added to market volatility.
German Data Impacts DAX Performance
On the data front, German industrial production data released on Friday showed a 1.0% month-on-month increase in January, surpassing expectations and suggesting a return to expansion in the country’s industrial sector. This positive data bolstered investor confidence in the German economy, providing further support for the DAX index.
Looking ahead, upcoming Eurozone Gross Domestic Product (GDP) data will be closely watched for insights into the overall economic health of the region, which could impact investor sentiment towards DAX-listed stocks.
US Congressional Testimony and Economic Data Influence
On the US front, Fed Chair Jerome Powell’s testimony before Congress hinted at possible interest rate cuts later in the year, contingent on inflation signals and economic data. Cleveland Fed President Loretta Mester echoed similar sentiments, suggesting potential rate cuts if economic conditions align with forecasts.
Investors are closely monitoring US economic data, including Nonfarm Payrolls for February, expected to show 200K new jobs created. Moreover, the CME FedWatch Tool suggests a 56.7% likelihood of a rate cut in June. With US initial jobless claims stable, investors awaited Powell’s second day of testimony for further insights into potential rate cuts.
Therefore, the DAX index may experience volatility as investors gauge the possibility of US interest rate cuts, influenced by Powell and Mester’s remarks and economic data signals.
German 40 (DAX) Price Forecast: Technical Outlook
The DAX Index, as of the latest session, demonstrates a slight contraction, trading at €17,814.51. The four-hour chart reveals key support established at the 50-Day Exponential Moving Average of €17,476.68, with a current pivot point at €17,809.05, suggesting a crucial threshold for bullish continuation. Resistance levels are forming at €17,902.82 and €17,999.25, with the potential to test the resilience of the upward momentum.
Technical indicators offer mixed signals; the Relative Strength Index (RSI) stands at 68.45, hovering near overbought territory, which could caution investors about potential retracements. Despite this, the upward trendline, extending from the lows of late February, is intact, indicating sustained buying interest.
In summary, the DAX’s trajectory appears cautiously optimistic, with key levels to watch: support at the upward trendline and resistance near the €18,000 threshold. A decisive move above this level may open the path to higher targets, while a break below could see the DAX retrace towards deeper support zones.
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