DAX Chases Record After Record: Will the Leading Index Continue Its Historic Rally?
The German leading index has embarked on an impressive run! The historic liberating blow on Thursday was promptly followed by the next all-time high on Friday—and with absolute conviction. Since the upward momentum settled at a healthy, stable level on Friday, there is currently no sign of an unhealthy market exaggeration. This feeds the justified hope among market participants that the DAX can set further records in the new trading week as well. Additional tailwind is expected from Wall Street: following the extended holiday weekend, the U.S. markets are likely to kick off trading in excellent spirits. It is a statistically proven fact that U.S. stock exchanges predominantly show a positive trend after such festivities.
Summer Data Dearth: Will the Undisturbed March Toward 26,200 Points Follow Now?
A look at the economic calendar promises a phase in which fundamental disruptions are scarce. With the U.S. purchasing managers' indices on Monday and the Federal Reserve's FOMC meeting minutes on Wednesday, only a few top-tier events are on the agenda. This points to primarily technically driven trading for the coming days. Since there is currently no new ad-hoc news from the geopolitical hotspots in Iran and Ukraine either, the path remains clear for the bulls. Things are now getting exciting in the so-called "uncharted area": because there is no longer any historical charting resistance to the upside, analysts have to work with projections. Taking the large impulse movement from mid-May as a basis, the next mathematical price target on the long side sits at around 26,200 points. However, if one uses the more recent dynamics from early June as a basis, the index might be running hot in the short term, which would leave room for a healthy consolidation.
Morning Economy Check: Can German Industrial Data Slow Down the DAX?
From a purely European perspective, the hour of truth for the real economy strikes this morning. The publication of German industrial new orders and the Sentix economic index for the Eurozone are imminent. These hard facts regarding the economic condition of Germany as a business location could cause noticeable, short-term volatility spikes on the trading floor. Given the enormous trend-following power and the global orientation of the DAX companies, however, this data is unlikely to have the potential to sustainably break the overarching, bullish upward trend. The market remains clearly in forward mode.
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