DAX Bulls Charge as Geopolitics and Earnings Converge

A diplomatic breakthrough in the Middle East has jolted Germany’s blue-chip index out of its recent lethargy. The DAX surged 2.27 percent on Friday, closing at 24,702 points, after Iran announced a temporary reopening of the Strait of Hormuz. The move sent Brent crude prices tumbling as much as twelve percent to around $86 a barrel, providing immediate relief to the energy-intensive industrial sector and reviving investor risk appetite.

The rally was broad-based, with cyclical and travel-related stocks leading the charge. Airlines and luxury goods manufacturers were among the top performers, buoyed by the prospect of lower fuel costs and a more stable global economic outlook. Within the DAX, industrial heavyweights like Siemens and MTU Aero Engines showed notable strength, while in the MDax, Lufthansa and airport operator Fraport posted significant gains, further supported by receding strike threats.

From a technical perspective, the index’s rebound is gaining credibility. The DAX successfully bounced off its 200-day moving average, a key long-term support level at precisely 24,113 points. With the Relative Strength Index sitting at a moderate 38, the market is not yet overbought, leaving room for further advances. Bulls are now eyeing a decisive break above the March high of 24,892 points, which would open the path toward the psychological 25,000 mark and the all-time high of 25,420 points set in January.

Should investors sell immediately? Or is it worth buying DAX?

The week ahead, however, shifts the focus squarely to fundamental drivers. A packed calendar of corporate earnings and macroeconomic data will test the sustainability of Friday’s geopolitical rally. The reporting season kicks into high gear, with investors keenly awaiting results from German stalwarts including SAP, Siemens, Mercedes-Benz, and Deutsche Bank.

Monday sets the tone with multiple events. At 08:00 CET, Germany’s Federal Statistical Office releases March producer price data, forecast to rise 1.4 percent. Later in the morning, the Hannover Messe industrial fair opens, featuring Chancellor Friedrich Merz and Siemens CEO Roland Busch, spotlighting the industrial sector. In the evening, ECB President Christine Lagarde is scheduled to speak in Berlin on the future interest rate path; a dovish tone could provide additional tailwinds for equities.

Further macroeconomic cues will follow throughout the week. The ZEW economic sentiment index is due Tuesday, S&P Global’s flash PMI data arrives Thursday, and the influential Ifo Business Climate index caps the week on Friday.

The convergence of these events places the DAX at a critical juncture. A successful navigation of the earnings season, coupled with supportive data, could fuel a swift test of the 25,000-point threshold. Should the index fail to overcome the resistance near 24,892 points, however, traders will watch the recent daily high of 23,759 as initial support. A break below that level could trigger a deeper pullback toward the 22,670-point zone. For now, the index has clawed back into positive territory for the year, up 0.66 percent.

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