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DAX 40 Daily Price Analysis – ECB Backdrop and Robust Economic Data Propel DAX 40 Higher

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  • Published:
dax30 germany market analysis 2

The German index opened higher today at 18,273.70 and reached 18,369.10 early in the session, reflecting ongoing confidence in the Eurozone’s economic recovery.

Key Points

  • Gains in Zalando SE and tech stocks were notable, while Daimler Truck Holdings underperformed.
  • Economic data releases, such as German factory orders and trade data, along with major corporate earnings, are expected to impact today’s market behavior.
  • The DAX broke above the 200 EMA, showing strong bullish momentum, but an overbought RSI points to possible near-term pullbacks.

DAX 40 Daily Price Analysis – 07/05/2024

The DAX 40 experienced a positive close on Monday, rising by 0.96% to end at 18,175 points, building on a 0.59% increase from Friday. This upswing is part of a broader positive trend, driven largely by strong economic indicators and supportive comments from the ECB. The HCOB Services PMI notably increased to 53.2, indicating a robust expansion in the service sector, which likely contributed to investor optimism.

Opening today at 18,273.70, the DAX surged to 18,369.10 early on, marking a 1.53% increase, influenced by ongoing positive market sentiment and favorable economic data. This suggests a growing investor confidence in the economic recovery and stability within the Eurozone.

Monday’s performance saw significant contributions from several key sectors. Zalando SE led the gains with a 2.65% increase, likely spurred by the market’s adjusted expectations following ECB Chief Economist Philip Lane’s comments that inflation is expected to stabilize by mid-2025. Technology stocks like Infineon Technologies and SAP also saw gains, buoyed by the potential for an accommodating ECB monetary policy.

The automotive sector reacted positively to Volvo’s impressive sales report, with notable gains in shares of Mercedes Benz Group and Volkswagen. However, Daimler Truck Holdings bucked the trend, reflecting ongoing concerns over the European market.

Key Economic Data and News to Be Released Today

Today’s trading session will be closely watched with the release of German factory orders and trade data. Expected improvements in factory orders and a widening trade surplus could reinforce beliefs in a strengthening German economy. Moreover, significant corporate earnings reports from giants like Ferrari, Siemens Healthineers, and Deutsche Post could provide additional market catalysts.

Later on, the RCM/TIPP Economic Optimism Index and comments from FOMC member Neel Kashkari will be in focus. Any deviation from expected figures or sentiment could sway market dynamics, particularly in response to recent mixed signals from the U.S. economy. Investors will be keen on assessing the broader implications of these economic indicators and central bank insights on market stability and future monetary policy.

Visit our Economic Calendar

DAX 40 Technical Analysis – 07/05/2024

The DAX has convincingly broken above the 200 EMA, a clear bullish signal indicating sustained upward momentum. This level often acts as a psychological benchmark for trend strength, with the current position above it confirming a strong buyer-driven market.

However, the RSI reading above 70 raises a flag. This overbought condition suggests that the current rally might be stretched, increasing the likelihood of a near-term pullback or at least some consolidation.

dax 1h chart
DAX40 1H Chart – 07/05/2024

The DAX has recently breached a significant resistance level at 18,320. This breakout is a strong bullish signal, often attracting more buyers into the market. Traders might look for a possible retracement to this level, which could serve as a new support, providing a favorable entry point for those looking to trade in line with the breakout.

Conversely, if the DAX were to decline and close below the 18,253 level, it might suggest a shift in market sentiment from bullish to bearish. This level could serve as a crucial pivot point for traders, as a close below this could confirm a change in the overall market bias and potentially lead to further selling pressure.

DAX 40 Fibonacci Key Price Levels 07/05/2024

Short-term traders planning to invest in Dax 40 today should keep a close eye on the following key price levels for the day:


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Risk Disclosure: The information provided in this article is not intended to give financial advice, recommend investments, guarantee profits, or shield you from losses. Our content is only for informational purposes and to help you understand the risks and complexity of these markets by providing objective analysis. Before trading, carefully consider your experience, financial goals, and risk tolerance. Trading involves significant potential for financial loss and isn't suitable for everyone.

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