Welcome back after the weekend! We’re kicking off the new trading week with a cautious tone across global markets. As investors digest last Friday’s U.S. inflation data and prepare for a heavy calendar of economic releases this week, the DAX is showing mixed signals. Let’s break down what happened last session, and how today is shaping up technically and fundamentally.
📊 Market Recap – Friday May 16th Session
DAX Closed Lower Amid Global Uncertainty
The DAX ended last Friday on a weaker note, closing near the 23,700 mark. After a strong open, selling pressure emerged post-lunch, driven by:
- U.S. CPI Data: Slightly hotter-than-expected core inflation triggered concerns over extended rate hikes, pressuring risk assets.
- European Earnings: Mixed Q1 reports from key DAX components such as Siemens and BMW led to sectoral divergence.
- ECB Comments: Hawkish undertones from ECB members further dampened sentiment, with more officials signaling reluctance to ease prematurely.
Volatility spiked intraday, but the DAX managed to avoid a breakdown below the 23,680 support, closing marginally above that line.
📅 Economic Calendar – Monday, May 19th
Key Events to Watch Today:
- 🇩🇪 German PPI (April) – Released at 07:00 CET: Slightly higher-than-expected at 0.4% MoM (vs. 0.3%). May raise short-term inflation expectations.
- 🇪🇺 EU Construction Output (10:00 CET) – Watching for signs of industrial slowdown or resilience.
- 🇺🇸 Fed Speeches Later Today – U.S. market will drive the afternoon tone; any comments around rate path will influence DAX via EUR/USD and risk sentiment.
Implications: Inflation stickiness and central bank hawkishness remain key risk drivers. While no blockbuster data today, sentiment is fragile.
📈 Technical Analysis – May 19th Session
Let’s decode the charts you’ve uploaded and identify directional setups.
📍 Chart 1: EMA, Volume & RSI
- EMA Cross (Short-Term): Bullish cross at ~16:00 Friday, now converging with price around 23,715, suggesting indecision.
- Volume: Spike during Friday’s selloff and reversal; Monday morning shows low commitment.
- RSI: 44 and falling — weak momentum. Below 50 = bearish territory unless we reclaim it.
➡️ Signal: Short-term upside capped. RSI + volume divergence leans bearish unless we reclaim 23,750 fast.
📍 Chart 2: Bollinger Bands & ATR
- Bollinger Bands: Tightening after Friday’s expansion. Price hugging lower band = risk of downside breakout.
- ATR (Volatility): Creeping higher — traders anticipating a move.
➡️ Signal: Low volatility compression with a downside tilt. Watch for breakdown below 23,682 (Band edge).
📍 Chart 3: MACD & ADX
- MACD: Bearish crossover with histogram printing red bars = bearish momentum building.
- ADX: Rising to ~17.8 — trend is strengthening, though not strong yet.
➡️ Signal: Bearish divergence confirmed. ADX is picking up, validating short-side setups.
📍 Chart 4: Support & Resistance Levels
- Key Resistance: 23,775 and 23,800.
- Key Support: 23,682 (blue line) — tested multiple times.
- Price is oscillating in a box (23,775–23,682) — breakout will define the trend.
➡️ Signal: Range play until broken. Break below 23,682 = momentum short.
📍 Chart 5: 40 SMA Shift
- Shifted 40 SMA: Price is now below the orange MA, with recent failure to reclaim it during overnight session.
- Color Change: Orange = bearish pressure remains dominant.
➡️ Signal: Medium-term trend has turned bearish. Unless reclaimed quickly, pressure remains on downside.
📍 Chart 6: Peak Reaction Zones
- Upper Zone: 23,834 – 23,903
- Lower Zone: 23,682 (near-term) and 23,358 (next major level)
➡️ Signal: Upside capped unless we clear 23,834. Eyes on potential flush toward 23,630 and 23,358 if 23,682 fails.
📍 Chart 7: Daily Pivot Levels
- Pivot (P): 23,801.87
- S1: 23,700.49 (being tested now)
- S2 & S3: 23,574.85 / 23,478.47
- R1: 23,927.51
➡️ Signal: Hovering around S1, bias shifts bearish on firm break. R1 too far unless sentiment flips.
🎯 Trading Signal – Bearish Intraday Breakout Setup
Setup: Sell on break of 23,682
Entry: 23,675
Stop: 23,775 (100 pts risk)
Target: 23,375 (3:1 reward)
Rationale: Confirmed bearish signals from MACD, RSI, BB/ATR, SMA shift, and price action rejection from resistance.
📌 Summary – What’s Driving the DAX Today?
- Macro uncertainty from sticky inflation and central bank caution is the overarching theme.
- Technicals favor downside: multiple bearish signals align across EMAs, MACD, RSI, and support structure.
- Watch 23,682: if it breaks, expect a quick move lower toward 23,375 and potentially deeper if U.S. session confirms risk-off tone.
