DAX on Hold: Downward Spiral Stopped, But Fear Lingers
The freefall in the DAX seems to have halted for now, but there is no trace of genuine relief on the Frankfurt trading floor. Uncertainty continues to keep the German leading index firmly in its grip. Although the U.S. is massively spreading geopolitical optimism, signaling that an end to the war involving Iran is within reach, the crucial confirmation from Tehran is still missing. As long as this remains absent, the market is left in the dark—and investors are acting with corresponding caution. Yesterday, Tuesday, this ambivalence was perfectly reflected on the charts: the DAX briefly and boldly knocked on the door of the 23,000-point mark but was unable to defend this high level due to a lack of follow-through buying. At the end of the day, a marginal minus of 0.07% at 22,636.91 points flashed on the pricing board.
Lagarde in Focus: Is a New Volatility Spike Looming This Morning?
Since the macroeconomic data calendar for the middle of the week is rather sparse, technical trading is likely to take the reins for now. However, there is one explosive exception: today, Wednesday, ECB President Christine Lagarde will step up to the microphone at 9:45 AM CET. Barely a week after the highly anticipated ECB meeting, market participants will be listening intently to see whether her speech hides new, directional clues regarding the looming inflation trajectory. Traders should absolutely brace themselves for sudden, erratic volatility spikes during this time window.
Technical Summary: Beware of the Classic Bull Trap!
From a purely technical perspective, a slightly downward-sloping sideways phase is currently emerging. A clear warning sign for the bulls: sustained buying pressure is simply missing. The market is still moving within Monday's broad trading range and is hovering dangerously close to the high of this bandwidth. If market participants fail to catapult the DAX upwards out of this boundary with genuine volume today, a classic false breakout is imminent. The logical consequence of such a bull trap would be a swift pullback to the south, subjecting the lower edge of the range—which currently acts as the buyers' strongest bastion—to another harsh stress test.
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