DAX Stabilises as Trump teases 45 day ceasefire

Liquidity & Holiday Context

• Most of Europe remains on holiday (Easter / Ching Ming), including Germany, France, Italy, Spain, Switzerland and the UK
• Liquidity expected to be subdued across European assets
• Volatility likely driven by US data and geopolitical headlines

Geopolitics – Iran, Hormuz & Ceasefire Talk

• Trump’s ultimatum expires today, but rhetoric has softened materially
• Axios reports discussions underway for a 45‑day ceasefire (“Islamabad Accord”):
  • Immediate ceasefire
  • Strait of Hormuz reopened
  • 15–20 days of negotiations toward permanent deal
  • Framework includes nuclear restraints in exchange for sanctions relief & asset release
• Iran has not yet committed, despite backing from Pakistan, China and the US
• Over the weekend, Iran cleared Iraq to resume Hormuz shipping, reinforcing a country‑by‑country reopening strategy
• Near‑term market takeaway:
  • Binary risk event avoided for now
  • Energy risk premium vulnerable if ceasefire rhetoric gains traction
  • Headlines remain the dominant driver

US Data – ISM Services (March)

US services data are estimated to show meaningful increases, contradicting current slowdown fears.

Component	Expectation	Prev
ISM Services PMI	56.1	54.0
Business Activity	59.9	58.0
Employment	51.8	51.7
New Orders	58.6	57.6
Prices Paid	63.0	70.0

Key Takeaways

• Services activity expected to reaccelerated
• Employment expected to remains expansionary
• Prices to ease sharply, suggesting no immediate second‑round inflation spiral due to energy cost increases.
• Together with:
  • Strong job data
  • Robust vehicle sales → The data depicts a resilient demand environment, not recession. However, we will need to wait for the actual numbers.

Macro Read‑Across

• The economy is appearing to be holding up better than sentiment suggests
• Disinflation via energy may resume if geopolitics cool
• Data vs narrative mismatch reflects headline‑driven risk aversion, not fundamentals
• Supports Fed “higher for longer, no rush” stance

Germany 40 (DAX) – Technical Outlook

• The index remains in a broader corrective downtrend
• However, price action shows early stabilisation signals due to 3 consecutive higher highs

Structure

• Higher lows formed since late‑March low near 22,300
• Price attempting to grind higher back above the EMA 100 around 23,500
• Still capped by bearishly aligned 50, 100 and 200‑period SMAs

Momentum

• MACD: now positive → downside momentum fading
• RSI: mid‑50s → neutral‑to‑constructive
• Stochastics: elevated and increasing after flattening → upside gaining urgency

Key Levels

• Resistance: 23,500–23,900 (critical EMAs)
• Breakout zone: 23,900–24,000 (trend improvement signal)
• Support: 23,200, 22,900 & 22,000

Bias

• Stabilisation > reversal
• Failure at resistance keeps move corrective
• A catalyst (geopolitical or macro) is needed for confirmation

Bottom Line

• Holiday liquidity + headline risk = fragile price action
• Geopolitics are shifting from escalation to negotiation mode, but remain unresolved
• US data argues against recession, supporting risk selectively
• DAX stabilising, but trend reversal not confirmed
• Markets remain headline‑driven, not data‑driven — for now

Regards,

Philip Papageorgiou

X (Twitter) PhilipForexCom