The negative number for industrial production was higher than the expected -0.6%. While the previous number for February’s data was revised down to +1.7% from 2.1%.

However, the DAX still started the day with a rally despite the decline in economic activity. The market is on a wave of bullish sentiment backed by high hopes for an interest rate cut as early as June.

Leading the way in today’s rally is Siemens Energy (ENR) up 10% on the day, followed by Fresenius up 2.9%. Siemens Energy’s rally comes after today’s earnings release where the company raised target guidance to 10%/12% revenue growth.

ENR also turned to profits for a second consecutive quarter with net profits of €68 million for Q1. The profits for Q1 are a big swing back from the losses sustained in the same quarter last year of €204 million.

Technical View

The day chart for the DAX below shows a bullish trend is back on track. The correction of that trend that started in April, hit a strong support from the cloud. The candle for April 19 created the bottom of that retracement.

The market has since recovered, yesterday’s candle managed to break the resistance (red line) created by 2 tops in the last week of April at 18237. The RSI is on the rise and still has room before hitting overbought territory.

The next test for the DAX will be the resistance level (blue line) at 18630, which was set by the all-time back on April 1. A correction of this bullish leg would find considerable support at 18237 (red line), which also coincides with the Ichimoku cloud.