The DAX gained 1.13 percent in the first trading minutes on Friday, indicating a positive market development and a recovery at the end of a turbulent week. This trend is part of a larger movement triggered by recent announcements from U.S. President Donald Trump. On Thursday, the DAX made a historic jump, gaining as much as 8 percent temporarily after Trump announced a suspension of higher tariffs. Despite these positive news, volatility remains high, suggesting that the recovery might continue to be under pressure.
Background
- Tariff Developments: President Trump’s announcement to suspend higher tariffs for many trading partners led to a strong rally in European stock markets. However, the tariffs are only postponed for the time being and not lifted. This means that the risk of a renewed escalation of the trade conflict still exists.
- Market Reaction: While the DAX was able to recover, it failed to overcome important technical resistances like the 100-day line at around 21,255 points. Indicators like MACD and DMI still show clear sell signals.
- Economic Uncertainties: In addition to the ongoing trade war, there are also economic uncertainties in Europe. Finance ministers are meeting in Warsaw to discuss the European economic outlook as well as other topics such as cryptocurrencies and the capital market union.
Current Market Situation
On Friday, the DAX initially opened higher; however, there were declines during the day. The index closed with a decrease of about 1.2 percent at around 20,307 points. These fluctuations reflect both the potential for further recoveries as well as the risk of new downturns.
Technical Analysis
The DAX faces important technical hurdles:
- Resistances: Overcoming the level between 20,775 to 20,825 points could open the way for further upward movements towards the level of about 21,000 points or even higher up to an intermediate high at around 21,300 points.
- Supports: If the index remains below these resistances or breaks through support levels such as around 20,450 points, this could lead to increased downward pressure and potentially allow for lower prices.
Macroeconomic Factors
The macroeconomic situation remains uncertain:
- Inflation Expectations: In Germany, decreasing inflation rates are expected; according to preliminary estimates, it was about two percent in March compared to three percent in previous months.
- Trade Tensions: Despite temporary easing, tensions between major economies remain.
In summary, the DAX shows a complex situation of short-term recovery phases within a broader environment full of geopolitical uncertainties and economic challenges.
Conclusion: The rise of the DAX on Friday is a positive signal within a market environment that remains turbulent. Despite this positive development, both geopolitical and economic uncertainties persist. The technical indicators show mixed signals: while some indicators are rising (RSI), others are clearly in sell mode (MACD). In the long term, it remains to be seen whether this movement will last or if it merely represents a “dead cat bounce.” The high volatility suggests that investors should remain cautious.