DAX Outlook: Gains Driven by Siemens, Infineon, and Fed Rate

My Trade:
A long trade at 18,730 on the DAX 30 is a bullish bet, signaling an expectation that the index will continue its upward momentum. Here’s the reasoning behind this setup:

Technical Indicators: The DAX remains above key moving averages, including the 50-day and 200-day EMAs, which are traditionally seen as bullish indicators. A breakout from the 18,750 level would affirm this momentum, supporting a potential rise towards the first target of 18,780, and further to 18,870[1].

Market Sentiment: With market optimism building around potential rate cuts from both the ECB and the Fed, rate-sensitive stocks have seen upward pressure. This environment could push the DAX higher as lower borrowing costs benefit corporate earnings and stock prices.

Support Levels: The stop-loss at 18,680 is set just below recent support, minimizing downside risk in case the market turns. This level should act as a cushion against significant drops if bullish momentum wanes[3].

Targeting 18,780 (TP1) allows for a short-term profit with minimal risk, while 18,870 (TP2) represents a more aggressive target, aligning with potential upward momentum toward all-time highs.

INFO

The German DAX 30 index rebounded on September 17, advancing by 0.50% to close at 18,726, recovering from the previous day's losses. Gains in major stocks like Siemens and Infineon, alongside positive market sentiment driven by hopes for a Fed rate cut, helped lift the index. This was complemented by easing fears of a U.S. recession, supported by stronger-than-expected U.S. retail sales data.

Key Market Drivers

1. Tech & Energy Sector Gains: Siemens Energy surged 4.26%, and Infineon rose by 3.24%, driven by expectations of both ECB and Fed rate cuts, which would benefit rate-sensitive stocks. Auto stocks like Volkswagen (+1.36%) and Porsche (+1.18%) also added to the positive momentum.
   
3. Retail Stocks Surge: Zalando SE led the charge with a 7.33% gain, fueled by Kingfisher raising the lower end of its profit forecast, boosting demand for retail stocks.
   

Economic Indicators

• The German ZEW Economic Sentiment Index dropped from 19.2 in August to 3.6 in September, signaling a challenging outlook for Germany’s economy.
  
• Eurozone inflation data, with the final August figures expected, could trigger further ECB rate cut bets, potentially lowering borrowing costs for businesses and boosting stock prices.
  

DAX Technical Outlook

• The DAX remains above its 50-day and 200-day EMAs, signaling continued bullish momentum.
  
• A break above 18,750 could drive the index toward the all-time high of 18,991, with a possible push to 19,200 if the Fed cuts rates by 50 basis points. Conversely, failure to hold key support levels could see a pullback toward 18,000.
  

The U.S. retail sales figures and Eurozone inflation data will be crucial for determining short-term market direction, with a focus on the Fed's upcoming rate decision.


🌐 Sources
fxempire.com - Dax Index News: Economic Data and Fed Rate Cut Bets to ...
euronews.com - Germany's economic sentiment takes a dramatic fall as ...
fxempire.com - Fed Rate Cut Bets Support DAX Amid Weak Eurozone ...