DAX – Will Powell Push the DAX to New Highs?

The DAX continues to hover near its all-time highs, while US indices have recently shown signs of weakness. Now, all eyes are on today’s Federal Reserve (Fed) rate decision. Will Fed Chair Jerome Powell provide fresh momentum for the German benchmark index?

Fed Decision: Market Focus on Economic Projections

At 7:00 PM CET, the Fed will announce its second interest rate decision of 2025. A rate pause is considered 99% certain, which means the market’s attention will shift to the accompanying Economic Projections. These projections include the central bank’s outlook on future interest rates, economic growth, and inflation.

Particularly, the Fed’s stance on future monetary policy could trigger significant market movements, as traders look for signals on when and how aggressively rate cuts might come.

Technical Analysis: Bulls Remain in Control

Primary Trend: Bullish – The DAX remains in a clear uptrend.
Pullbacks as Buying Opportunities: Every minor consolidation is quickly bought up by market participants.
Key Support Zone: The 22,000 – 22,100-point range is the first crucial level to watch. A break below could challenge the broader bullish trend.
Daily ATR Remains High: The Average True Range (ATR) suggests that volatility remains elevated, allowing for short-term counter-movements.

Trading Strategy: Opportunities & Risks

Long Scenario: As long as the DAX remains above the 22,000 level, the bullish scenario stays intact. A breakout above the previous all-time high could unlock further upside potential.
Short Scenario: Due to the prevailing strength, short trades are only advisable for aggressive traders. However, these should be executed with tight stop losses, as pullbacks are quickly absorbed by buyers.

Conclusion: All Eyes on the Fed

While the rate decision itself is unlikely to surprise, Powell’s comments and the updated Economic Projections could provide fresh impulses. The DAX remains in a strong uptrend, and unless a significant shift in sentiment occurs, bulls are expected to maintain control.

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