Dax Index News: Bullish DAX Forecast Eyes 22,500 on Trade Optimism and Macro Cues

DAX Extends Winning Streak on US-China Trade Developments

The DAX powered ahead for a fourth straight session on Friday, April 25, gaining 0.81% to 22,243, its highest close since April 2. Easing US-China trade tensions reignited global risk appetite and brought the Index within striking distance of record highs.

News of China exempting certain US goods from its 125% tariffs reinforced expectations of a US-China trade deal. Beijing’s move followed Trump’s announcement that trade negotiations had resumed.

Aerospace and Autos Shine

Shares in German aircraft engine manufacturer MTU Aero soared 4.64%, with Airbus rallying 2.42% after Safran, France’s jet engine manufacturer, beat Q1 revenue forecasts. Safran also expressed confidence in achieving its full-year targets, tariff developments permitting.

Hopes of a softer US stance on tariffs fueled gains in auto stocks. Daimler Truck Holding advanced 2.21%, with BMW, Mercedes-Benz Group, Porsche, and Volkswagen also posting solid gains.

US Markets Hit Three-Week Highs on Trump’s Trade Pivot

US equity markets also extended their winning streak to four sessions on April 25, buoyed by China’s shift in tariff policies.

Tech stocks continued to lead the gains, with the Nasdaq Composite Index advancing 1.26%, while the Dow and the S&P 500 rose 0.05% and 0.74%, respectively.

Tesla (TSLA) rallied 9.8% amid hopes that regulatory changes would support the firm’s innovation in self-driving technology.

US economic indicators provided additional market relief, with the Michigan Consumer Sentiment Index revised upward from a preliminary 50.8 to 52.2 in April. Nevertheless, the Index was down from March’s 57 as consumers fretted about the potential impact of tariffs on the economy.

US Manufacturing and Trade Developments in Focus

The focus now shifts to the Dallas Fed Manufacturing Index, out on Monday, April 28. Economists expect the Index to rise from -16.3 in March to -15 in April. A higher print could boost demand for risk assets as trade tensions ease. Conversely, a softer reading may raise recession fears, potentially impacting risk sentiment.

Trade developments will be a key driver for market trends. A further de-escalation in trade tensions between the US and the EU would likely boost demand for German-listed stocks.

Valdis Domrovskis, EU Commission Commissioner for Economy and Productivity, commented:

“The EU is willing to reach mutually agreeable solution on tariffs, for the sake of European and US people.”

Dombrovskis spoke in an interview with CNN, stating that the EU remains subject to US tariffs while the EU has suspended tariffs on US goods in hopes of reaching an agreement before the 90-day deadline.

DAX Outlook: Watching Macro and Central Bank Cues

The DAX’s near-term trajectory hinges largely on central bank commentary and trade developments.

Potential DAX scenarios include:

• Bullish Case: A de-escalation in the US-EU and US-China trade wars or dovish central bank guidance could push the DAX toward 22,500.
• Bearish Case: An escalation in trade tensions or hawkish central bank rhetoric may drag the DAX below 22,000.

As of Monday morning, the DAX futures were up 28 points, while the Nasdaq 100 mini dropped 120 points, indicating a volatile session.

Technical Setup: Cautious Optimism

According to the daily chart, the DAX continues to trade above the 50-day and the 200-day Exponential Moving Averages (EMA), reaffirming underlying bullish momentum.

• Upside Target: A break above the April high of 22,574 could signal a move toward 22,750. A decisive breakout from 22,750 may pave the way for a retest of the record high of 23,476.
• Downside risk: A drop below 22,000 could enable the bears to target the 50-day EMA, with 21,500 as the next key support level if selling intensifies.

Conclusion: Monitor Macro Themes

DAX investors should closely monitor global trade headlines, key US economic data releases, and European Central Bank commentary. These factors will likely dictate market direction and risk sentiment in the near term.

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