After an impressive rally, DAX has now returned to its previous highs. But this upward move looks more like an engineered push rather than a healthy breakout. From a technical and sentiment-based perspective, it feels overextended. That’s why I initiated a short position from this level. No need to predict the top—just follow the setup and manage risk.
Technicals:
• Price has returned to previous highs after a sharp V-shaped recovery.
• The rally lacks structure—no clear consolidation or volume support.
• We’re also near a historical EQ level that has acted as a turning point before.
Fundamentals:
• Philips cut its 2025 profit margin forecast citing U.S. tariffs as a major drag—this isn’t an isolated signal.
• Hugo Boss and other exporters confirmed revenue weakness due to U.S. trade tensions, adding to the bearish bias for European equities.
• President Trump’s warning about additional tariffs on pharmaceuticals could severely affect key European sectors.
• Global trade uncertainty and tariff retaliation fears have returned. These external shocks are significant for export-heavy indices like the DAX.
• With the Fed’s policy decision pending and no concrete trade deals, markets are shaky. Sentiment remains fragile.
This isn’t just a chart move — it’s a narrative setup. Markets can push higher on euphoria, but engineered rallies without backing tend to snap. I don’t need to catch the top perfectly — just be in when reality bites back.
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
Technicals:
• Price has returned to previous highs after a sharp V-shaped recovery.
• The rally lacks structure—no clear consolidation or volume support.
• We’re also near a historical EQ level that has acted as a turning point before.
Fundamentals:
• Philips cut its 2025 profit margin forecast citing U.S. tariffs as a major drag—this isn’t an isolated signal.
• Hugo Boss and other exporters confirmed revenue weakness due to U.S. trade tensions, adding to the bearish bias for European equities.
• President Trump’s warning about additional tariffs on pharmaceuticals could severely affect key European sectors.
• Global trade uncertainty and tariff retaliation fears have returned. These external shocks are significant for export-heavy indices like the DAX.
• With the Fed’s policy decision pending and no concrete trade deals, markets are shaky. Sentiment remains fragile.
This isn’t just a chart move — it’s a narrative setup. Markets can push higher on euphoria, but engineered rallies without backing tend to snap. I don’t need to catch the top perfectly — just be in when reality bites back.
Note: Please remember to adjust this trade idea according to your individual trading conditions, including position size, broker-specific price variations, and any relevant external factors. Every trader’s situation is unique, so it’s crucial to tailor your approach to your own risk tolerance and market environment.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.