US Manufacturing in Focus
Later in the European session on Monday, June 16, the NY Empire State Manufacturing Index will draw interest as trade tensions simmer. Economists expect the index to increase from -9.2 in May to -6.7 in June. A higher print may support a positive economic outlook, potentially boosting demand for risk assets, including DAX-listed stocks. Conversely, a sharp decline may revive US recession fears, impacting sentiment.
While Monday’s economic data needs consideration, trade developments and Middle East-related news will likely impact risk sentiment more.
Outlook: Key Catalysts for the DAX
The DAX’s near-term price trajectory hinges on the Middle East developments, trade headlines, US data, and ECB commentary.
- Bullish Case: Progress toward a US-EU trade deal, easing Middle East tensions, strong manufacturing data, and dovish ECB signals could send the DAX above 24,000.
- Bearish Case: Rising geopolitical risks, weak US data, or hawkish ECB rhetoric may pull the DAX toward 23,000.
At the time of writing on June 16, the DAX futures dropped 51 points, while the Nasdaq 100 mini gained 33 points, signaling a choppy start to the week. WTI crude oil rose 1.14% to $73.81 in early trading.
Over the weekend, the Kobeissi Letter reported that Iran was willing to end strikes on Israel if Israel ceased attacks on Iran shortly after President Trump stated a deal could easily be reached. However, Iran later reportedly told mediators its not open to ceasefire talks of Israel continues to attack, fueling uncertainty about a swift end to the conflict.
Technical Setup Suggests Cautious Optimism
Despite a six-day losing streak, the DAX remains above the 50-day and the 200-day Exponential Moving Averages (EMA), indicating underlying bullish momentum.
- Upside Target: A breakout above 23,750 could enable the bulls to target 24,000. A sustained move through 24,000 may open the door to the June 5 record high of 24,479.
- Downside risk: A drop below 23,500 exposes the 50-day EMA and the May 23 low of 23,275.
The 14-day Relative Strength Index (RSI), at 45.37, indicates the DAX has room to fall to 23,000 without entering oversold territory (RSI< 30).
