The German DAX index opened today’s session higher, supported by improved risk appetite across European markets and strong earnings results from several major companies, led by Siemens, which announced a €6 billion share buyback program after reporting quarterly profits that exceeded expectations.

Investors are also awaiting additional earnings reports from major German companies while continuing to monitor the European Central Bank’s outlook on interest rates, particularly amid ongoing inflationary pressures in the eurozone.

Meanwhile, geopolitical risks and global trade tensions continue to weigh on market sentiment, especially as investors await the outcome of the anticipated meeting between US President Donald Trump and Chinese President Xi Jinping, which could have a direct impact on global risk appetite and market direction.

Figure 1: DAX, H4, TradingView

From a technical perspective, the German DAX index remains in a broader uptrend, continuing to form higher highs and higher lows. The recent decline appears to be a corrective pullback ahead of a continuation of the bullish trend, supported by several technical factors:

  • Market structure remains positive, as the price continues to hold above the 23,606 level. As long as the price does not form a lower low below this level on the 4-hour timeframe, the bullish trend is likely to remain intact.
  • The current price is trading near a key support level at 23,934.7, which represents the 78% Fibonacci retracement level. This suggests a deep corrective move and increases the probability of a rebound that could resume the upward trend.
  • The Exponential Moving Averages (EMA) 5 (red), 10 (yellow), and 21 (black) have started shifting from a downward slope back to the upside. If the EMA 5 and EMA 10 cross above the EMA 21, it would signal further bullish momentum and increase the potential for additional gains.