A Positive Weekly Close as the Spark? DAX Eyes a Breakthrough
On Friday, the DAX gave investors and traders a long-awaited sigh of relief. The leading index managed to bring its recent slide to an impressive halt, quite literally taking the bears by the horns once again. However, it is worth noting that the day didn't initially look like it would end so positively. In pre-market trading, the DAX dipped below last Monday's low, sparking fears that the downward spiral would gain further momentum.
Relief from Overseas: US Retail Sentiment as a Game Changer
Final relief only arrived during afternoon trading, fueled by positive retail sentiment data from the US. This unexpected boost unexpectedly lifted spirits on Wall Street, and the optimism quickly crossed the pond to European markets. The DAX ended the week at 24,721.46 points, a solid gain of nearly 1% from its session lows.
This newfound momentum from Friday could indeed carry over into the coming trading week. The schedule ahead is packed with high-stakes events: Non-Farm Payrolls are set for Wednesday, followed by crucial US inflation data at the end of the week. These reports could either provide further support for the markets or, at the very least, ensure that volatility remains a constant guest on the floor.
Looking Ahead: Technical Trading and Sentix Focus
As we head into the new trading week, it is highly likely that European markets will try to maintain Friday’s "tailwinds." Monday is expected to be dominated by technical trading, as there is a lack of heavy-hitting economic data. One minor exception is the Sentix Investor Confidence report at 10:30 AM CET, which could provide some initial direction for sentiment in the Eurozone.
Technical Summary: Has the Worst Passed?
From a technical perspective, the chart looks decidedly optimistic following Friday’s bullish reversal. For now, it appears the worst of the downward potential has been weathered, as the critical support zone around 24,350 to 24,400 points was successfully defended. Market participants will likely start the week with one clear goal in mind: reclaiming the psychologically important 25,000-point mark.
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