DAX Rallies Toward 24K on Tariff Cuts, Momentum Stretched

 🌍 Global Markets & Trade

• Markets rallied Monday on optimism over US-China trade talks. The US is said to lower Chinese Tariffs to 30% for 90 days. China will lower Tariffs to 10%. Officials called the Geneva meeting “constructive” with “substantial progress” reported, boosting risk sentiment.
• S&P 500 and Nasdaq futures rose over 1%; Chinese equities gained despite weak inflation data.
• Dollar strengthened vs. safe havens; gold fell 1.7% as risk appetite returned.
• Oil prices edged up, supported by trade optimism, though capped by OPEC+ supply plans.
• Fed rate cut expectations decreased: only 17% chance seen for June, 59% for July.

🇺🇸 US Productivity

• Q1 productivity (ex-agriculture) fell 0.8%, the first decline since Q2 2022.
• Output dipped slightly, while hours worked rose 0.6%.
• Industrial sector was the bright spot (+4.5%), driven by strong aircraft production.
• Productivity grew 1.4% YoY but the drop may pressure corporate margins and revive rate cut talk.

🛢️ Energy Markets

• Oil volatility remains high:
• Hit a 4-year low of $55.30 last week.
• Rebounded above $60, but slipped midweek (~−3%) on fading trade optimism.
• US crude inventories fell by 2.03M barrels, but failed to boost prices meaningfully.
• Sustainable oil recovery hinges on de-escalation in trade tensions and improved economic sentiment.
• Natural gas prices rebound:
• After halving from €60 to €30/MWh (Feb–Apr), prices rose in May.
• Drivers:
• Trade de-escalation hopes,
• EU gas storage at just 42% (vs. 51% avg),
• EU commitment to end Russian gas imports by 2027, with new bans starting 2026.

🇩🇪 DAX Technical Overview (4H Chart)

• DAX trades at 23,860 (+0.81%) after China’s tariff cuts to 10–30% for 90 days.
• Breakout above key resistance confirms strong bullish momentum from April lows.

🔧 Technical Setup:

• Price above all EMAs (bullishly aligned); 20 EMA at 23,456 holds as dynamic support.
• RSI at 78.86 and Stochastic RSI in deep overbought zone → signs of short-term overheating.

🔑 Levels:

• Resistance:
• 🔺 24,000 (psychological)
• 🔺 24,300–24,500 (extended target)
• Support:
• 🟢 23,450–23,400 (20 EMA zone)
• 🟡 23,100–22,900 (prior structure)
• 🔵 20,474/20,193 (long-term base)

📈 Outlook:

• Bias: Bullish, but due for a short-term pullback or consolidation.
• Holding above 23,450 keeps bulls in control; watch 24,000 for potential pause or breakout continuation.