US Trade in Focus
Later Today, US trade data will draw interest. Economists expect the US trade deficit to widen from $122.78 billion in February to $129 billion in March. A higher deficit could draw Trump’s attention, raising the risk of fresh tariffs. However, a lower reading may ease tariff risks, potentially boosting demand for risk assets such as German-listed stocks.
With US trade data in focus, investors should monitor trade headlines, crucial for market trends. Wall Street Journal Chief Economic Correspondent Nick Timiraos underscored the interplay between tariffs and Fed policy, stating:
“The Fed’s dilemma: Navigate a recession or a period of stagflation. The result: ‘This is not going to be a cycle where the Fed pre-emptively cuts because there’s a forecast of a slowdown. They’re going to actually need to see it in the tangible data’.”
Near-Term Outlook
The DAX’s near-term trajectory hinges on economic indicators, trade developments, and central bank guidance.
- Bearish Scenario: An escalation in US-EU trade tensions, weak economic data, and hawkish central bank commentary could send the DAX below 23,000.
- Bullish Scenario: Progress on a US-EU trade deal, upbeat economic data, and dovish central bank rhetoric could drive the DAX toward 23,500.
DAX Technical Indicators
Daily Chart
The DAX trades above the 50-day and 200-day Exponential Moving Averages (EMA), maintaining a bullish bias after a nine-day rally.
A breakout above the record high of 23,476 could open the door to 23,750, with 24,000 in sight on sustained momentum.
On the downside, a fall below 23,000 could bring 22,750 into play, with the next support at 22,500.
The 14-day Relative Strength Index (RSI) at 67.04 indicates the DAX could move toward 23,500 before entering overbought territory (RSI > 70).
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