DAX U-Turn: Breakout Turns into a Treacherous Bull Trap!
The DAX is once again teaching market participants a lesson in humility. While many thought Wednesday's impressive performance meant the rest of the week would be a formality, the leading index showed its uncomfortable side on Thursday. With a decline of 0.9%, the Frankfurt floor experienced a bitter setback. The only technical silver lining: the DAX managed to save itself by closing at 25,043.57 points, clinging by a thread to the psychologically important 25,000 mark. The foundation for a further rise remains, but it is shaking violently.
War Anxiety and Geopolitical Tensions: US Escalates Iran Conflict
The primary reason for the sudden nervousness came from overseas. The US signaled clear readiness for action against Iran, immediately shifting markets into "risk-off" mode. Fears of a military escalation over the weekend sent investors fleeing to safe havens and weighed heavily on prices, particularly on Wall Street. Simultaneously, oil prices have come into sharp focus; concerns over supply disruptions pushed prices higher, which in turn fuels inflation fears.
The skepticism was clearly reflected in the DAX rankings. Brenntag was the weakest performer with a drop of 1.1%, closely followed by Adidas, which also ranked among the biggest losers with a 0.9% decline. Even the previously celebrated heavyweights could hardly withstand the undertow of geopolitical uncertainty.
Friday Showdown: A Hail of Earnings and Economic Checks
Carrying this unease, we head into a jam-packed end to the week. Today, Friday, delivers a flood of economic data that could massively move the DAX. Starting at 8:00 AM, the focus is on German Producer Prices—a decisive indicator for future inflationary pressure. At 9:30 AM, the Purchasing Managers' Index (PMI) for Germany will provide a reality check for domestic industry: are companies expecting full order books, or is the next stagnation looming? From 10:00 AM onwards, Eurozone data will follow suit.
The corporate side is just as busy: BASF, Allianz, Deutsche Telekom, and Puma all released their financial results starting at 7:00 AM this morning. The subsequent press conferences will reveal how management views the outlook for 2026 and whether these "cash machines" of the real economy can support the index.
Technical Summary: Hanging by a Thread at 25,000
Technically, the DAX lost massive momentum due to yesterday’s reversal. Reclaiming 25,000 was vital, but the upward dynamic has vanished for now. It remains to be seen if the index can defend this mark today in the face of geopolitics and the data deluge. If the PMIs disappoint, there is a risk of a slide back toward 24,800 points.
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