German 30 (DAX) Price Forecast: Climbs to 18,439 Amid Easing Tensions & Positive Economic Data
The DAX index, Germany's leading stock market indicator, has been on a bullish trend and gained positive traction around the 18,394.5 level
The DAX index, Germany’s leading stock market indicator, has been on a bullish trend and gained positive traction around the 18,394.5 level, hitting the intra-day high of 18,439.5.
The reason for its upward trend can be attributed to the easing of geopolitical tensions, particularly between Israel and Iran. As conflicts show signs of slowing down, investor confidence strengthens, leading to increased investment in the stock market.
Besides this, upbeat economic data from Germany and the Eurozone, including the German IFO survey and higher-than-expected preliminary Services PMI data, have bolstered optimism among investors.
Moreover, the Federal Reserve’s hawkish stance, signaling a commitment to keeping interest rates high to combat persistent inflation, has further boosted market confidence, driving the DAX index higher.
German IFO Survey and Eurozone Services PMI Data Boost DAX Index
The DAX index gained strong positive traction following the release of positive economic indicators from Germany and the Eurozone. The German IFO survey revealed an improvement in business sentiment, surpassing expectations with the Business Climate Index reaching 89.4 in April.
Similarly, the Eurozone reported higher-than-expected preliminary Services PMI data, indicating resilience and growth in the services sector.
These upbeat economic indicators have fueled optimism among investors, leading to increased buying activity in the stock market and driving the DAX index higher.
On the data front, the German IFO Business Climate Index rose to 89.4, surpassing expectations and showing improvement from March’s 87.9. The Current Economic Assessment Index also climbed to 88.9, higher than the previous month’s 88.1.
Further, the IFO Expectations Index for the next six months increased to 89.9 from 87.7. Despite these positive signs, manufacturing PMIs for France and Germany in the Eurozone remained weak, indicating ongoing contraction since June 2022.
However, the services sector saw improvement, with France’s index reaching 50.5 and Germany’s rising to 53.3, while the eurozone-wide services PMI hit 52.9, its highest level since May 2023, showing resilience in this sector.
Easing Geopolitical Issues Support DAX Index Growth
Moreover, the upticks in the DAX index were further bolstered by the easing of geopolitical tensions, particularly in regions like the Middle East. Conflicts between Israel and Iran have shown signs of slowing down, easing concerns among investors about potential market disruptions.
As geopolitical risks decrease, investor confidence strengthens, leading to a more favorable investment environment and contributing to the positive performance of the DAX index.
Fed Hawkish Stance Impacts DAX Index
On the US front, the Federal Reserve’s hawkish stance, signaling a willingness to maintain high-interest rates to address inflationary pressures, has had a strong impact on the DAX index.
However, the prospect of tighter monetary policy in the United States has led to a stronger US dollar, which, in turn, has influenced global markets, including the DAX index.
Investors closely monitor the Fed’s decisions and statements, and the hawkish stance has contributed to market volatility.
Although the higher interest rates can slow down economic growth, they show that the Fed is serious about fighting inflation, which helps keep the market stable. This means the DAX index might go up and down depending on what the Fed decides to do.
German 30 (DAX) Price Forecast
The German 30 index closed today at $18,184.94, marking a 0.26% increase. Positioned just above its pivot point of $18,103.96, the index showcases potential for further bullish behavior.
The next resistance levels to watch are at $18,322.08, $18,512.07, and $18,678.12, which could restrict upward movements if tested.
On the downside, immediate support lies at $17,936.62, with further support at $17,711.57 and $17,462.50, serving as potential rebound zones in case of a pullback.
The Relative Strength Index (RSI) at 63 suggests growing bullish momentum, yet not in the overbought territory. The 50-day Exponential Moving Average (EMA) is at $17,994.31, below the current price, supporting a bullish outlook.
If the DAX stays above $18,103.96, the uptrend may continue, but falling below this pivot could trigger significant selling pressures, suggesting a strategic point for traders to watch closely.
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