DAX Holds Above 23,300: A Bullish Bastion in the Geopolitical Storm
The DAX is certainly not showing signs of strength at the moment. Thursday was yet another "red day" for traders and investors in the German leading index, which closed the session at 23,589.65 points. However, the index is proving it still has substance even in these turbulent times. It is refusing to give up any more ground—especially when it comes to the support level at 23,300 points. "This far and no further" seems to be the clear message from the DAX bulls to the bearish camp. But just how long this game can last will currently be decided solely by world politics and the impulses communicated from there.
Stalemate in the Gulf: The Price of Uncertainty
Pinned down by the blockade of the Strait of Hormuz, more than 150 tankers remain stuck. Meanwhile, Iran continues to land painful "pinpricks" by repeatedly attacking oil tankers. Have the U.S. and Israel perhaps miscalculated how quickly Tehran could be brought to its knees? The Iranian leadership appears to be successfully controlling internal pressure for now, despite the threat of even harsher U.S. retaliation. As long as this strategic bottleneck for the global energy market remains closed, the liberating impulses for a true DAX rally are nowhere to be found.
The Inflation Fear Factor: All Eyes on U.S. PCE Data
Today, Friday, all eyes are on the United States. At 1:30 PM CET (8:30 AM ET), the PCE data (Personal Consumption Expenditures) will be released. This indicator provides insight into the increase in personal consumption costs and is the Federal Reserve's preferred measure of inflation. The burning question: are the surged oil prices already fully filtering through? If the data exceeds the 3.1% forecast, hopes for rate cuts will drift into the distance. Paradoxically, the opportunity lies in the fact that the market has already priced in a lot of negativity—any "not quite as bad" news could act as a catalyst.
Technical Summary: Between Stabilization and Downside Risk
Technically, the aforementioned price level at 23,300 points is serving as a vital support. If this level holds through the weekend, the worst of the sell-off wave may be behind us. While the chart looks erratic due to high volatility, the signs point more toward a relaxation of the panic, provided no further military catastrophe occurs. Nevertheless, due to the real threat of inflation, it cannot be ruled out that significant DAX growth will remain elusive for the time being.
The information provided does not constitute investment research. The material has not been prepared in accordance with the legal requirements designed to promote the independence of investment research and as such is to be considered to be a marketing communication.
All information has been prepared by ActivTrades (“AT”). The information does not contain a record of AT’s prices, or an offer of or solicitation for a transaction in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information.
Any material provided does not have regard to the specific investment objective and financial situation of any person who may receive it. Past performance is not a reliable indicator of future performance. AT provides an execution-only service. Consequently, any person acting on the information provided does so at their own risk. Forecasts are not guarantees. Rates may change. Political risk is unpredictable. Central bank actions may vary. Platforms’ tools do not guarantee success.