US Futures Dip in Morning Trade
The US Futures markets posted losses ahead of the European opening bell on Friday, June 20. Rising oil prices, the Iran-Israel conflict, and Fed Chair Powell’s stance on tariffs and inflation remained headwinds. The Dow mini fell 106 points, while the Nasdaq 100 and S&P 500 dropped 38 and 12 points, respectively. US markets were closed on June 19.
Philly Fed Manufacturing Index in Focus
Later in the European session on June 20, the Philly Fed Manufacturing Index needs consideration. Economists expect the Index to rise from -4 in May to -1 in June. A higher print could ease US recession fears, boosting demand for risk assets, including the DAX. However, a sharp fall may revive speculation about a US recession, impacting sentiment.
While the data will influence risk appetite, trade developments, and Iran-Israel conflict-related news remain the key drivers.
Outlook: Key Catalysts for the DAX
The DAX’s near-term trajectory hinges on news from the Middle East, trade headlines, and ECB commentary.
Bullish Case: Progress toward a US-EU trade deal, de-escalation in the Israel-Iran conflict, and dovish ECB signals could drive the DAX toward 23,500.
Bearish Case: Threats of a US strike on Iran, rising trade tensions, or hawkish ECB rhetoric may drag the DAX toward 22,750.
At the time of writing on June 20, the DAX futures gained 162 points, tracking the Hang Seng Index higher. Easing fears of a US strike boosted demand for risk assets.
According to Polymarket, the chances of US military action against Iran by July stood at 60%, down from 90% on June 18.
Technical Setup Suggests Cautious Optimism
After Thursday’s sell-off, the DAX trades below the 50-day Exponential Moving Average (EMA), while remaining above the 200-day EMA. The EMAs send bearish short-term signals but longer-term bias remains bullish.
Upside Target: A breakout above the 50-day EMA could support a move toward 23,500. A return to 23,500 may open the door to retesting 23,750.
Downside risk: A break below 23,000 could expose 22,750.
The 14-day Relative Strength Index (RSI), at 37.56, indicates the DAX has room to drop below 23,000 before entering oversold territory (RSI< 30).
