DAX Re-Test of 18,000 by Month-End? Weighing the Odds
Been watching the DAX fairly closely this past week, and the resilience, despite some choppy action, has been notable. We've seen a few attempts to break higher, but also a persistent magnet around the 18,200-18,300 zone. With the recent consolidation, I'm starting to think about potential retests of prior support levels if macro sentiment shifts even slightly.
Specifically, I'm giving a roughly 60% probability to a re-test of the 18,000 mark on the DAX before the end of May. My reasoning isn't based on any single catalyst, but rather a confluence of factors. Inflation prints across the eurozone haven't exactly been dovish, and while the ECB is playing a careful hand, any further hawkish rhetoric or a surprisingly strong US jobs report could easily spark some profit-taking in European equities, especially after a fairly strong run. Furthermore, we've had some significant corporate earnings pass, and without new positive catalysts, a bit of 'sell the news' could set in. It's not a call for a deep correction, more of a natural consolidation within a broader uptrend, but one that could certainly tag that psychological 18,000 level again. A close below that, however, and the picture changes fairly quickly. On the flip side, sustained positive momentum in US tech could easily drag European markets higher, making that 60% quickly erode.
That's an interesting take on the DAX. I'm relatively new to this, so I'm curious what specific macro factors you're looking at that could trigger that shift down to 18,000 so quickly?