While the inflation data will be crucial, corporate earnings will also impact the DAX’s banking sector. US banking giants Citigroup (C), JP Morgan Chase, and Wells Fargo (WFC) are on the earnings calendar to release results today.
Near-Term Outlook
The DAX’s near-term outlook hinges on US-EU trade talks, US inflation data, and central bank policy signals.
- Bearish Scenario: Rising US-EU trade tensions, hotter-than-expected US inflation, or hawkish central bank rhetoric. Under these scenarios, the DAX may fall toward 24,000, potentially exposing the 50-day EMA.
- Bullish Scenario: A US-EU trade deal, cooler US inflation, and dovish central bank cues may drive the DAX toward the July high of 24,639.
DAX Technical Indicators
Daily Chart
Despite a three-day losing streak, the DAX remains above the 50-day and 200-day Exponential Moving Averages (EMA). The EMAs indicate a bullish bias.
A breakout above 24,500 could pave the way to the July 10 high of 24,639. Sustained buying pressure may enable the bulls to target 24,750.
On the downside, a drop below 24,000 could bring the 23,750 level into play. Increased selling pressure may expose the 50-day EMA.
The 14-day Relative Strength Index (RSI), at 56.65, indicates the DAX could climb to 24,750 before entering overbought territory (RSI > 70).