State of Shock on the Trading Floor: Middle East Worries and Oil Price Shock Shackle the DAX!
The German leading index is starting the new trading week as if paralyzed. The acute uncertainty in the Middle East holds the DAX in an iron stranglehold and leaves the bulls treading water. Wall Street, too, is currently failing to deliver any sparking impulses for a breakout. The looming escalation around the strategically vital Strait of Hormuz is increasingly suffocating the global economy. In parallel, Brent crude is shooting inexorably toward the $90 mark. This toxic scenario is fueling highly dangerous interest rate fears: the market is gradually beginning to price in further rate hikes. The logical consequence? The DAX is moving further and further away from the psychological 25,000-point mark and threatens to painfully target the next chart-technical support zone at 24,500 points.
AI Beacon of Hope Hits Technical Rock Bottom: Will a Breakthrough Come Before Earnings?
Among individual stocks, the anxious gaze of investors is focused on a prominent cloud and AI giant. At a price of around 139 euros, the stock is trading dangerously close to its 52-week low (130.80 euros) and well below the magic moving averages of the last 50 (144.62 euros) and 200 days (175.85 euros). Although the highly anticipated quarterly figures are not on the agenda until July 23rd, the technically severely battered stock is already moving massively into focus. The all-important question on the trading floor is: Will the multi-billion investments in artificial intelligence finally translate into accelerated demand, or is the next severe setback imminent?
Moment of Truth: Will the ZEW Index Save the DAX from a Crash?
As the domestic economy continues to limp along, hopes this Tuesday rest entirely on the ZEW Index. The release at 11:00 a.m. is the undisputed news highlight of the day and harbors enormous potential to drastically increase volatility. The central question for traders: Can this important economic barometer provide liberating impulses, or will the Middle East oil crisis crush any optimism? A first ray of hope is the friendly US pre-market (Nasdaq +0.9 percent). The decisive factor, however, will be whether the DAX can find the strength to crack yesterday's daily high of 24,974 points in order to finally bring the magic 25,000-point mark back into striking distance!
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