While the data will influence risk sentiment, Russia-Ukraine peace talks will be key.
Wall Street Mixed as Jackson Hole Symposium Looms
Wall Street traded mixed on Tuesday, August 19. The Dow edged 0.02% higher, while the Nasdaq Composite Index and the S&P 500 fell 1.46% and 0.59%, respectively. Rate-sensitive tech stocks bore the brunt as investors braced for Fed Chair Powell to temper hopes of near-term cuts.
Fed Speakers in Focus
Later in Wednesday’s session, FOMC members’ speeches will set the tone. Any support for a September Fed rate cut and further policy easing in Q4 could lift risk appetite and the DAX. However, calls for patience to gauge the effect of tariffs on US inflation would likely weigh on German equities.
The Fed’s Meeting Minutes, due after the European close, may offer further clues. July import prices rose 0.4% after a 0.1% drop in June, a shift economists link to new tariffs — and a potential complication for the Fed’s inflation fight.
Outlook: Key Catalysts for the DAX
The DAX’s near-term outlook hinges on US-Russia peace talks, key economic data, and central bank monetary policy cues.
Bullish Case: Progress toward a Russia-Ukraine peace deal, softer German producer prices, and dovish central bank signals. These factors could send the DAX toward the 24,500 resistance level and potentially the all-time high of 24,639.
Bearish Case: Stalled peace talks, stronger German producer prices, or hawkish central bank rhetoric. These scenarios may push the DAX toward the crucial 24,000 support level, exposing the 50-day EMA.
Ahead of the European opening bell on August 20, the DAX futures slid 158 points, while the Nasdaq 100 dropped 99 points. Futures market trends reflected investors’ unease about the Fed’s upcoming monetary policy guidance.
DAX Technicals
Following Tuesday’s gain, the DAX trades comfortably above its 50-day and 200-day EMAs, indicating a bullish bias.
Upside Target: A breakout above the 24,500 level could pave the way to the all-time high of 24,639. A sustained move above 24,639 could enable the bulls to target 25,000.
Downside Risk: A drop below 24,150 could bring the 24,000 support level and the 50-day EMA into play. If breached, 23,500 would be the next key support level.
