German 30 (DAX) at $18,835 Amid ECB Policy Uncertainty and Global Economic Stimulus

The DAX index, Germany's leading stock market indicator, continues its positive momentum, reaching around the 18,835 mark and peaking..

Written by: Arslan Butt • Tuesday, May 21, 2024 • 2 min read

• Last updated: Tuesday, May 21, 2024

The DAX index, Germany’s leading stock market indicator, continues its positive momentum, reaching around the 18,835 mark and peaking at an intraday high of 18,886.

This upward trend is driven by favourable economic conditions and uncertainty surrounding the policies of major central banks, particularly the European Central Bank (ECB) and the Federal Reserve (Fed).

DAX Price Chart - Source: Tradingview — DAX Price Chart – Source: Tradingview

Economic Factors and Global Influences

Investor sentiment has been buoyed by recent economic stimulus measures from China aimed at supporting its property sector. These measures have provided a positive outlook for global markets, which has, in turn, contributed to the DAX’s gains.

Additionally, ongoing speculation about future interest rate decisions in both the Eurozone and the United States is influencing market performance.

ECB Policy Uncertainty

The DAX’s performance is also being closely watched in light of mixed signals from ECB officials. Martins Kazaks, a member of the ECB Governing Council, suggested that the central bank might start lowering borrowing costs in June, though he stressed the importance of gradual adjustments based on economic data.

On the other hand, ECB Executive Board member Isabel Schnabel expressed caution about the prospect of consecutive rate cuts, warning that premature easing could reignite inflation.This uncertainty about the ECB’s next moves has created a cautious atmosphere among investors.

They are keenly observing ECB communications and upcoming economic data releases to gain a clearer picture of the central bank’s policy direction, which will likely impact the DAX’s future performance.

German 30 Price Forecast

DAX is trading at $18,690.28, down 0.43%, reflecting a minor pullback. On the 4-hour chart, the pivot point stands at $18,594.97, a crucial level to watch.

DAX Price Chart - Source: Tradingview

Immediate resistance is at $18,695.82, followed by $18,816.56 and $18,950.05. On the downside, immediate support is at $18,461.48, with further support at $18,333.33 and $18,253.18.

Technical indicators show the Relative Strength Index (RSI) at 45, indicating neutral momentum. The 50-day Exponential Moving Average (EMA) is at $18,694, acting as a significant resistance level.

In conclusion, if DAX holds above $18,595, it remains bullish. However, a break below this level could trigger a sharp selling trend.