Dax Index News: Bullish Forecast as DAX Eyes 23,750 on Trade Optimism

DAX Breaks New Ground on Trade Optimism

Hopes for a US-EU trade deal boosted demand for risk assets on Friday, May 9, bolstered by Thursday’s US-UK trade agreement. The DAX advanced 0.63%, closing at a record high of 23,499. Earlier in the session, the DAX climbed to a new intraday all-time high of 23,543 before easing back.

Stock Movers: Earnings and US-EU Trade Bets Boost Risk Sentiment

Commerzbank rallied 4.36% after beating earnings forecasts. Deutsche Bank advanced 1.90%. Auto stocks also advanced on rising optimism around a US-EU trade deal. BMW gained 1.84%, with Porsche, Volkswagen, and Mercedes-Benz Group ending the session in positive territory.

Trade Developments in Focus

The US administration announced a China trade agreement on Sunday, May 11. Easing US-China tensions will likely boost demand for DAX-listed stocks on Monday, May 12.

However, investors must await full details of the deal. A zero-tariff agreement would be the best outcome for the DAX. Conversely, markets may react adversely to a high-tariff deal that could sink hopes for further trade negotiations. The US administration will release details of the deal on Monday, May 12, which will be crucial for the DAX’s short-term outlook. Notably, a US-China deal could boost hopes for a US-EU trade agreement.

Wall Street Retreats on Trade Fears

Wall Street snapped a mini winning streak on Friday, May 9, as market focus turned to Switzerland and looming trade talks. The Nasdaq Composite Index ended the session flat, while the Dow and the S&P 500 fell 0.29% and 0.07%, respectively.

Investors moved to the sidelines amid uncertainty surrounding a potential US-China trade deal. President Trump’s earlier remarks, warning of 80% tariffs, had dampened risk sentiment.

Analysts warned that such rhetoric could derail trade negotiations. Peter Berezin, Chief Global Strategist and Director of Research at BCA Research, noted:

“Trump is clearly playing the good cop/bad cop game… but I am skeptical it will work in trade negotiations with the world’s largest manufacturing producer.”

Fed Commentary May Influence Risk Appetite

During the US session, on Monday, May 12, Fed commentary and trade headlines will influence risk appetite. FOMC Member Kulger is on the calendar to speak. Hawkish remarks could test demand for risk assets, including German-listed stocks. Conversely, Fed support for a June rate cut to bolster the US economy may boost risk sentiment.

However, trade developments remain crucial for the DAX. Details of the US-China deal and progress toward a US-EU trade agreement could trigger a DAX breakout. Conversely, a loose US-China trade agreement and stalled US-EU talks may weigh on German-listed export stocks.

DAX Outlook: Trade, Data, and Central Banks in the Driver’s Seat

The DAX’s trajectory depends on trade developments, corporate earnings, and FOMC member commentary.

• Bullish Case: Positive trade headlines, upbeat earnings, and dovish Fed signals could spur a DAX rally to 23,750.
• Bearish Case: Rising trade tensions, US recession jitters, or hawkish Fed rhetoric could pull the DAX toward 23,000.

As of Monday morning, the DAX futures were up 183 points, while the Nasdaq 100 mini jumped 377 points, highlighting market sentiment toward the trade news.

Technical Setup Suggests Cautious Optimism

Following last week’s gains, the DAX trades above the 50-day and the 200-day Exponential Moving Averages (EMA), affirming positive momentum.

• Upside Target: A break above the record high of 23,543 could extend gains toward 23,750. A sustained move through 23,750 may enable the bulls to target 24,000.
• Downside risk: A drop below 23,350 could bring 23,000 into play, with increasing selling pressure paving the way to testing support at 22,750.

The 14-day Relative Strength Index (RSI) at 66.57 shows the DAX has room to climb toward 23,750 before entering overbought territory (RSI > 70).

Conclusion: Monitor Macro Themes and Trade News

DAX traders should closely monitor trade headlines, Fed and ECB signals, and corporate earnings to gauge short-term market trends.

Explore our exclusive forecast to see whether trade optimism can fuel a DAX breakout. Click here to explore our latest DAX research, macro insights, and emerging market coverage.