With the US labour market in the spotlight, comments from the Federal Reserve will also be worth keeping an eye on, with Fed Chairman Powell due to speak.
Will the Fed Chairman react to the US Personal Income and Expenditure report or wait for the US employment data (Friday)?
Short-term outlook
The near-term movement of the DAX will depend on euro zone inflation, the French election and US labor market data. Weaker than expected euro zone inflation and higher US unemployment could signal a breakout for the DAX. However, with Sunday's runoff election looming, investors should keep a close eye on updates from France.
In the futures market, the DAX and Nasdaq Mini fell 48 and 71 points, respectively.
In conclusion, rising expectations of interest rate cuts from the ECB and Fed are a boon for the DAX, but a hard landing in the Eurozone and the US and the unexpected majority of the National Rally Party on Sunday dampen buyer appetite for riskier assets.
DAX Technical Indicator
Daily Chart
The DAX is above the 50-day and 200-day EMAs, sending out bullish price signals.
A recovery to 18,500 could see the bulls targeting the 18,750 levels. A breakout above the 18,750 levels could bring the 19,000 levels into sight.
French election news, eurozone inflation, US labour market data and central bank topics need to be taken into account.
Conversely, if the DAX sinks below the 50-day EMA, the bears can push the price down to 18,000. If it sinks below 18,000, the support level at 17,615 will come into play.
The 14-day RSI is at 49.13, pointing to a drop to the support level at 17,615 before entering oversold territory.
