The DAX index, a measure of the performance of the 30 largest companies listed on the German Stock Exchange, rose on Thursday and this upward trend was driven by several factors including positive trade data from Germany.

Meanwhile, the expectations of central banks implementing policies to support economic growth boosted investor confidence in the market.

However, uncertainties related to decisions by the European Central Bank regarding interest rates and the release of economic data from the United States could affect investor sentiment and market stability.

German Trade Signals Boost Investor Confidence

On the data front, investors were focused on German trade figures, which revealed a larger trade surplus and a notable uptick in exports. Meanwhile, the trade surplus grew from €22.2 billion to €27.5 billion in January, while exports jumped by 6.3% compared to the previous month, rebounding from a decline in December.

These positive numbers indicate stronger demand for German goods, which in turn boosts investor trust in the companies listed on the DAX. This uptick in exports and trade surplus is a positive sign for the German economy, suggesting potential growth and stability for the companies in the DAX index.

On the other side, the European Central Bank (ECB) decision on interest rates plays major roles in impacting the DAX index. Experts expect the ECB to maintain interest rates at 4.50%, but uncertainty surrounds potential rate cuts. If the ECB suggests a cautious stance, it could affect demand for stocks in the DAX index.

Federal Reserve’s Interest Rate Cut Stance and US Economic Data

On the US front, the Federal Reserve’s decisions on interest rates are closely watched because they can significantly impact the DAX index in Germany. People think the Fed might reduce interest rates in early 2024, especially after recent bad news about jobs.

The ADP reported fewer new jobs than expected, and there weren’t enough job openings, leading to talk of a rate cut. Fed Chair Powell hinted at this, making people expect it more. Any unexpected comments from Powell or others could affect the DAX index.

Therefore, the DAX index is influenced by the Federal Reserve’s interest rate decisions and US economic data. However, the speculation about a potential rate cut and labor market conditions in the US affect investor sentiment.

German 30 (DAX) Price Prediction: Technical Outlook

On March 7, the German 30 (DAX) slightly retreated, marking a 0.10% decrease to close at 17699.98. This movement occurs within a framework of critical support and resistance levels, with the DAX navigating a complex technical landscape.

The pivot point stands at 17646.41, setting the stage for immediate resistances at 17799.00, 17881.70, and 17955.54. Conversely, support levels are identified at 17569.40, 17487.19, and 17412.07, indicating potential floors for price corrections.

The Relative Strength Index (RSI) at 66, together with the 50-Day Exponential Moving Average (EMA) at 17444.33, generally suggest a favorable buying trend despite recent challenges to the upward channel.

This contrast highlights a nuanced market sentiment, where bullish momentum above 17640 is countered by the potential for a sell-off should the index dip below this critical threshold.