At the end of May, we noted that the German stock index DAX 40 (Germany 40 mini on FXOpen) was exhibiting significantly stronger performance compared to other global equity indices. However, we also highlighted the 24,100 level as a strong resistance zone.

Two months have passed, and the chart now suggests that bearish signals are intensifying.

From a technical analysis perspective, the DAX 40 (Germany 40 mini on FXOpen) formed an ascending channel in July (outlined in blue). However, each time the bulls attempted to push the price above the 24,460 level (which corresponds to the May high), they encountered resistance.

It is worth noting the nature of the bearish reversals (indicated by arrows) – the price declined sharply, often without intermediate recoveries, signalling strong selling pressure. It is likely that major market participants used the proximity to the all-time high to reduce their long positions.

From a fundamental standpoint, several factors are weighing on the DAX 40 (Germany 40 mini on FXOpen):
→ Ongoing uncertainty surrounding the US–EU trade agreement, which has yet to be finalised (with the deadline approaching next week);
→ Corporate news, including disappointing earnings reports from Puma, Volkswagen, and several other German companies.

Given the above, it is reasonable to assume that bearish activity could result in an attempt to break below the lower boundary of the ascending blue channel.

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