DAX Index Technical Analysis: Bullish Breakout Pattern Strengthens Amid Global Uncertainty

German equities, especially exporters and financials, remain highly sensitive to EU-wide sentiment. When political confidence in France weakens, it creates broader macro instability across the eurozone. This backdrop makes the DAX more vulnerable to investor rotation away from cyclical sectors.

Trump’s Intervention at Fed Sends Shockwaves Through European Markets

Global markets reacted sharply after US President Trump fired Fed Governor Lisa Cook, raising concerns about central bank independence. This unprecedented move triggered a sell-off in risk assets, including European stocks, as investors rushed to safe havens amid growing uncertainty.

The DAX had rallied earlier on dovish hints from Fed Chair Powell. However, it lost momentum as fresh doubts emerged over the stability of US monetary policy. Since the Fed’s credibility underpins global liquidity, any disruption can quickly ripple across markets, dampening risk appetite in Europe.

The chart below shows that the Chicago Fed National Financial Conditions Index has dropped to -0.55, which indicates loose credit conditions. The loose credit conditions and expectations of rate cuts provided strong support for the DAX. However, political intervention at the Fed raises uncertainty about the path of monetary easing. If rate expectations shift again, volatility in the DAX could increase, with persistent inflation and energy-related risks in Germany.