DAX Tests Trendline Ahead of Powell & Lagarde Talks

U.S. Markets & Quarter-End Rally

• U.S. stocks closed higher, ending the month and quarter on a strong note.
• Apple (+2%) helped boost sentiment amid reports it may integrate OpenAI or Anthropic tech into Siri.
• Focus shifted to Capitol Hill, where the Senate advanced Trump’s tax bill, now in the “vote-a-rama” phase before returning to the House for final approval.

Federal Reserve & Rate Outlook

• President Trump increased pressure on Fed Chair Powell, calling him "Too Late Powell", and reportedly sent him a handwritten note asking for rate cuts.
• Goldman Sachs now expects three 25bp rate cuts in 2025 starting in September (previously only one in December).
• Powell is set to speak today at a conference with BoE’s Bailey, ECB’s Lagarde, and BoJ’s Ueda.

Trade Developments

• Trump criticized Japan for rejecting U.S. rice during a shortage and said a letter would be sent.
• The White House is narrowing trade focus, pursuing phased deals with highly engaged countries ahead of the July 9th deadline.
• Press Secretary Leavitt said we will hear about an India trade deal soon.
• The EU is willing to accept Trump’s universal tariff but is pushing for:
  • Lower rates on pharmaceuticals, alcohol, semiconductors, aircraft
  • Exemptions and quotas to reduce 25% auto and 50% steel/aluminum tariffs.

Currency & Commodities

• The U.S. dollar weakened throughout the session, lifting most G10 currencies (except GBP).
• Spot gold rose above $3,300/oz, supported by dollar weakness and cautious sentiment ahead of upcoming data.
• Bitcoin was little changed, trading choppily around $107,000.

DAX Technical Analysis 4 hour chart

Quick Overview:

• Current Price: ~23,900
• Last Candle: Bearish, testing trendline support

Indicators Breakdown:

1. Bollinger Bands (20,2)

• Price recently bounced off the lower band, rallied strongly, and is now turning down from the upper band, suggesting an overbought short-term reaction is easing.
• The bands are starting to narrow slightly — signaling reduced volatility after the bounce.

2. RSI (14)

• Currently at 54.45 — neutral zone.
• It peaked near 70, showing the short-term rally has cooled, and we now see mild bearish divergence.

3. MACD (12,26,9)

• MACD histogram is declining, and the lines are converging toward a possible bearish crossover.
• Bullish momentum is fading, and a cross would confirm weakening trend strength.

Trend & Price Structure:

• The price recently bounced off 23,200, retesting prior support.
• It found resistance near 24,100–24,200, failing to break through decisively.
• Current candle is testing a short-term ascending trendline — a break below could push toward the 23,700–23,650 zone quickly.

Key Levels to Watch:

Resistance:

• 🔺 24,000–24,100: Near-term ceiling
• 🔺 24,200+: Breakout level to re-test highs

Support:

• 🟢 23,850: Short-term trendline
• 🟢 23,700–23,650: Consolidation support
• 🟢 23,500–23,200: Critical zone for bulls

Summary:

• 📉 Momentum is waning, and price is flirting with trendline support.
• 🕯️ If the price closes below 23,850, expect potential downside to 23,700–23,650.
• 📈 Bulls need to reclaim 24,000–24,100 to resume upside.

Short-term bias:
Neutral to Bearish — watch for breakdown confirmation or reclaim of 24,000 for directional clarity.

 

Japan Market & Policy

• Nikkei 225 underperformed due to stronger yen hurting exporters.
• A better-than-expected BoJ Tankan survey increased the likelihood of more hawkish policy.
• Trump repeated plans to send a letter to Japan about tariffs following the rice dispute.

Scheduled Economic Data Today

• Canada: Holiday
• 11:00 (EUR) – CPI (YoY Jun): Expected 2.0% (last: 1.9%)
• 15:30 (USD) – Fed Chair Powell speaks
• 15:30 (EUR) – ECB President Lagarde speaks
• 15:45 (USD) – S&P Global Manufacturing PMI (Jun): Expected 52.0
• 16:00 (USD):
  • ISM Manufacturing PMI (Jun): Expected 48.8 (last: 48.5)
  • ISM Manufacturing Prices (Jun): Expected 69.6
  • JOLTS Job Openings (May): Expected 7.32M

Other Headlines

• The dispute between Trump and Elon Musk continues. (No further details provided.)

Outlook: Markets are cautiously optimistic following Apple’s boost and Senate progress on tax reform. Attention turns to today’s key CPI, PMI, and Fed/ECB speeches for directional signals.