Chart of the day

Where do we stand fundamentally?

The latest DAX upside rally which happened in the five upside waves was triggered and fueled by expectations of the rate cut or more cuts this year by the ECB. The inflation in the EUR area is quite strong still and it will be quite dangerous to cut rates at the next meeting in June.

DAX reached 19000 and it is reversing down from it. This is a strong upside resistance of a steep long-term rising wedge. This should be the end of a long-term Elliott Wave fifth wave higher which will be partially confirmed and accelerated upon a confirmed break below 18400

We are seeing the reversal and a break below 18500. A break above 19000 is required for an upside continuation. A confirmed break below 18400 will lead to a deep fall into 16000.

_{Look for the short trade entries with a stop loss above 18800. I see this as an ending consolidation before a big fall and a test of the important 16500 support level.}