DAX forecast: Markets maintain gains despite reports of ceasefire violation

 

As we head towards the European close, it is a good sign to see markets holding onto their gains despite some reports of violation of the ceasefire with Israel continuing to bombard Lebanon which, in turn, has trigged Iran to stop the passage of oil tankers via Hormuz strait according to some reports. Still, oil prices were holding to the bulk of the losses and equity markets eased only slightly off earlier highs. Investors are confident that oil prices could ease further and the Strait of Hormuz will re-open again and hopefully stay open beyond the two-week ceasefire period. Markets that had underperformed are storming back, including the Germany DAX index and euro. Lower oil prices directly ease stagflation concerns, which had been a major headwind for the DAX forecast previously. Now, traders are unwinding those bearish bets, and this is fuelling a big, short covering rally. Dip buyers haven’t had many opportunities yet, but surely, they will be looking to buy any dips we see now while hopes for a long lasting peace remains.

 

Sentiment remains positive as oil dips

 

The markets have flipped notably in the last 24 hours. What looked like a defensive, dollar-driven market through March has quickly turned on its head after the ceasefire agreement between the US and Iran. The reaction was classic macro playbook. Risk assets caught a bid, crude tumbled, and the dollar gave back a chunk of its safe-haven premium. European equities extended gains, while FX markets leaned into a softer dollar narrative. While this initially felt like a relief rally than a fully confirmed trend reversal, market reaction so far suggests this could be more long-lasting. But a lot now depends on oil prices and the Strait of Hormuz. 

 

One of the major beneficiaries of the turnaround in risk appetite is the DAX. The key driver here is energy. Fresh comments from Donald Trump today suggesting progress towards a more permanent resolution added another leg lower in crude. More importantly, Iran signalling safe passage through the Strait of Hormuz is a big deal for global supply. If shipping flows normalise, the market will likely continue unwinding those defensive trades. That said, markets have already priced a good portion of this shift. The easy move may already be behind us. Markets will now need time to digest these moves, perhaps unwind a little before we see more potential gains.

 

Technical DAX forecast: key levels to watch

 

From a technical point of view, the DAX forecast has turned bullish after breaking a series of resistance levels, even before the news of the ceasefire agreement was announced. We had already seen the index form a couple of higher lows and reclaim the 22,900 level, which marked the low from November 2025.

 

 

 

That level was pivotal, and once it was reclaimed, the bearish bias on the DAX was effectively invalidated. Since then, we’ve seen further bullish price action from a purely technical standpoint.

 

Obviously, the move has mainly been influenced by developments regarding Iran and the ceasefire agreement, but even from a technical perspective, things were already looking positive.

 

A few resistance levels to watch include 24,200, which was the low in February and was taken out during the height of geopolitical tensions in the Middle East in early March. That level was being tested now, which may act as resistance and cap the upside.

 

In addition, the 200-day moving average is coming into focus around 24,120, which was also being tested at the time of writing.

 

In the shorter term, additional upside levels to watch include 24,570, followed by the base of the breakdown around 24,880.

 

On the downside, initial support comes in at 23,960, followed by 23,495. But the key support level is now seen at 23,410, which marks the high of Tuesday’s range.

 

Looking ahead, the next move will likely depend on whether dips continue to be bought, particularly in the context of easing geopolitical tensions following the ceasefire agreement.

 

For a bearish reversal to re-emerge, we would need to see a clear reversal pattern combined with a fresh escalation in Middle East tensions. Without that, the bullish structure remains intact.

 

 

 

 

 

-- Written by Fawad Razaqzada, Market Analyst

Follow Fawad on Twitter @Trader_F_R