GER40

The trade war has escalated and there is going to be a lot of back and forth from now until the April 2 “liberation day.” Against this backdrop, we will maintain a short-term bearish view on the European markets. The DAX outlook could weaken if we see further support levels break in the coming days, which could accelerate the selling pressure.

Sentiment has been boosted because Germany’s incoming Chancellor Friedrich Merz has unveiled plans to inject hundreds of billions of euros into defence and infrastructure, which marks a significant departure from Germany’s traditionally rigid borrowing rules, fuelling optimism for a broader economic uplift across Europe. The focus is now turning to the ECB rate decision and President Lagarde’s press conference tomorrow, which could influence the DAX forecast.

Lingering tensions between the US and Europe could temper risk appetite, particularly after last week’s cautious trading, when concerns over US President Donald Trump’s stance on tariffs, coupled with stretched valuations, unsettled investors. For these reasons, we maintain a cautious DAX forecast despite a positive start to the week.

With the US out for a holiday, the focus remains firmly on European markets today, where stocks have been surging lately thanks to Trump pushing for a swift resolution to the Ukraine war. But have the markets got ahead of themselves with all this optimism? This DAX analysis shows the German index is now at extremely overbought levels, which calls for caution.

With much of the positivity surrounding a potential resolution to the Russia and Ukraine war, Trump’s softer tariffs tone and ECB rate cuts all priced in, you do wonder how much further the index will be able to rise without first staging a correction of some sort. So, our DAX forecast is neutral at these levels, and we would not be surprised if markets now headed lower for a while, even if, ultimately, the bullish trend then continues.

With the US out, it has understandably been a quiet day so far in Europe where major indices were trading mixed but holding onto their recent impressive gains. Some of the major European indices hit new record highs last week, including the high-flying German DAX index.

European stocks traded mixed with Spain’s Ibex rising to a fresh weekly high and Germany’s DAX off its earlier lows at mid-day in London as government bond yields eased off their earlier highs.

DAX analysis: After climbing an impressive 18% last year and 20% the year before, the DAX has made a decent start to the new year, up a good 2.2% year-to-date. But it is early days and with valuations looking a little stretched and the economy not doing so well, we could see correction first before the market resumes higher.

The absence of new bearish news and a light economic calendar have helped improve risk appetite somewhat. While not completely out of the woods, the market's realignment with fundamentals offers a more optimistic outlook. Stay tuned for further updates as the DAX tries to establish a base around its 200-day average.

The German DAX index is showing a bullish signal, setting the stage for potential gains on Friday and possibly in early next week ahead once the French elections are out of the way.

We have seen further widening of the bond yield spreads between German and French debt today. Investors are clearly worried about a sustained period of political uncertainty and are therefore seeking haven assets and reducing their risk exposure.

DAX drops to test key technical support area as Wall Street is spooked by latest inflation data, further raising doubts over Fed's ability to cut rates. Earnings from Microsoft and Alphabet to come after the bell.

Earnings have helped to lift the mood so far in today's session, but risk appetite could be limited amid ongoing geopolitical risks and uncertainty over interest rates outlook. DAX technical analysis shows the German index is still residing in a bearish channel, despite the bounce.

The S&P 500 extends losses to third week amid raised geopolitical risks and rising bond yields. Concerns over the escalation of the situation in the Middle East is at the forefront of investors’ minds. The situation remains volatile with Israel seeking revenge for Iran’s retaliatory attacks on Saturday.

DAX technical levels and factors to watch on the German index as it tests the pivotal 18,000 level with the focus turning on the ECB rate decision, while US sticky inflation concerns make unwelcome return ahead of PPI data.

German DAX index makes a sluggish start to Q2 after a sharp 5-month rally amid profit-taking, as correction risks linger. DAX technical analysis suggests more evidence is needed to confirm at least a short-term high has been hit.

What has driven the German index to record highs and can the rally persist? US investors are back, with Nvidia earnings coming into focus this week. DAX technical analysis shows index is testing key support.