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DAX Analysis – Investor Sentiment Rises and The German DAX Reaches New Highs!

GER40 – Investor Sentiment Rises and The German DAX Reaches New Highs!

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Investor sentiment over the past week has improved as currencies start to show weaker trends, the economy remains resilient and rate cuts are pending in most economies. In addition to this, the sentiment amongst investors is also improving as companies continue to beat expected earnings data. However, investors do show some concerns that Siemens, which holds most of the index’s weight, has seen earnings significantly decline.

GER40 – Technical Analysis

The day’s downward price movement is only forming a retracement in the medium-term price action. The downward price movement read 0.45% before slightly losing momentum. Regardless of the downward price movement, the 75-Bar EMA and RSI continue to point towards buyers maintaining control of the market. When monitoring order flow, the price is trading below the VWAP, but above previous significant levels of the volume profile. If the Delta statistics again rise, order flow is also likely to point towards a continued upward price movement. Investors will monitor how the price action changes once the US session opens.

Based on Fibonacci, if the price rises above 17,414, buy signals will again materialize. However, if the price declines below 17,367, the price can continue to retrace to 17,117 to 17,252. In the meantime, the main price driver will be comments from global central banks and Thursday’s inflation reading for Europe. Some analysts advise the key factor is for inflation to decline, not necessarily to read lower than expectations.

GER40 – Fundamental Analsysis

Later this afternoon, Joachim Nagel, the head of the German Federal Bank and a prominent member of the ECB known for his hawkish stance, is scheduled to deliver a speech. Investors will closely analyze his remarks. Previously, Mr. Nagel emphasized that it is premature to consider interest rate reductions. However, with German inflation dropping below 3.00% for the first time in years, there is speculation whether ECB members will adopt a more dovish stance. Next Thursday, Germany, France, and Spain are set to release their inflation figures, followed by Italy on Friday. If the inflation numbers fall below expectations, the GER40 index could potentially see an upward movement.

Economists also point to the latest PMI data as a factor suggesting that the ECB might soon decide to lower interest rates. Both German and UK PMI data came in below expectations, indicating a slowdown in growth in the coming months. While France exceeded PMI forecasts, it remains below the crucial 50.00 mark.

The 5 Individual Stocks Within the DAX With the Strongest Influence!

  1. Siemens AG – +2.88% in 2024
  2. SAP SE – +22.89% in 2024
  3. Allianz SE – +0.65%
  4. Airbus SE – +4.23%
  5. Deutsche Telekom AG – (0.93%)
  6. Munich RE – +11.20%
  7. Infineon Technologies AG – (8.66%)
  8. Mercedes-Benx Group AG – +14.13%
  9. BASF Se – (6.23%)
  10. DHL Group – (3.27%)
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Michalis Efthymiou
HFM’s Market Analyst
Michalis Efthymiou brings over 9 years of extensive experience in the financial services industry across the United Kingdom and Europe. Initially serving as a financial advisor in London for 5 years, he has transitioned into the field of market analysis over the past 4 years.
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