DAX Outlook: Gains Driven by Siemens, Infineon, and Fed Rate My Trade:
A long trade at 18,730 on the DAX 30 is a bullish bet, signaling an expectation that the index will continue its upward momentum. Here’s the reasoning behind this setup:
Technical Indicators: The DAX remains above key moving averages, including the 50-day and 200-day EMAs, which are traditionally seen as bullish indicators. A breakout from the 18,750 level would affirm this momentum, supporting a potential rise towards the first target of 18,780, and further to 18,870 .
Market Sentiment: With market optimism building around potential rate cuts from both the ECB and the Fed, rate-sensitive stocks have seen upward pressure. This environment could push the DAX higher as lower borrowing costs benefit corporate earnings and stock prices.
Support Levels: The stop-loss at 18,680 is set just below recent support, minimizing downside risk in case the market turns. This level should act as a cushion against significant drops if bullish momentum wanes .
Targeting 18,780 (TP1) allows for a short-term profit with minimal risk, while 18,870 (TP2) represents a more aggressive target, aligning with potential upward momentum toward all-time highs.
INFO
The German DAX 30 index rebounded on September 17, advancing by 0.50% to close at 18,726, recovering from the previous day's losses. Gains in major stocks like Siemens and Infineon, alongside positive market sentiment driven by hopes for a Fed rate cut, helped lift the index. This was complemented by easing fears of a U.S. recession, supported by stronger-than-expected U.S. retail sales data.
Key Market Drivers
Tech & Energy Sector Gains: Siemens Energy surged 4.26%, and Infineon rose by 3.24%, driven by expectations of both ECB and Fed rate cuts, which would benefit rate-sensitive stocks. Auto stocks like Volkswagen (+1.36%) and Porsche (+1.18%) also added to the positive momentum.
Retail Stocks Surge: Zalando SE led the charge with a 7.33% gain, fueled by Kingfisher raising the lower end of its profit forecast, boosting demand for retail stocks.
Economic Indicators
The German ZEW Economic Sentiment Index dropped from 19.2 in August to 3.6 in September, signaling a challenging outlook for Germany’s economy.
Eurozone inflation data, with the final August figures expected, could trigger further ECB rate cut bets, potentially lowering borrowing costs for businesses and boosting stock prices.
DAX Technical Outlook
The DAX remains above its 50-day and 200-day EMAs, signaling continued bullish momentum.
A break above 18,750 could drive the index toward the all-time high of 18,991, with a possible push to 19,200 if the Fed cuts rates by 50 basis points. Conversely, failure to hold key support levels could see a pullback toward 18,000.
The U.S. retail sales figures and Eurozone inflation data will be crucial for determining short-term market direction, with a focus on the Fed's upcoming rate decision.
🌐 Sources
fxempire.com - Dax Index News: Economic Data and Fed Rate Cut Bets to ...
euronews.com - Germany's economic sentiment takes a dramatic fall as ...
fxempire.com - Fed Rate Cut Bets Support DAX Amid Weak Eurozone ...
