The DAX 30 regained some positive momentum last week and is now trading again in a tight range near the all-time highs as Friday’s push higher wasn’t enough to break above 14,140. Investors continue to be focused on the bond market as yields steepen their rise, with the US 10-year now topping at 1.601%, its highest level since February 2020.
An increase in bond purchases would likely ease investor concerns in the short-term as central banks would be taking action to control the yield curve, but given Jerome Powell’s recent remarks, we might continue to see bond purchases slow this week, pushing yields higher and putting greater pressure on stocks.
Zooming out on the daily chart we can see how the current price is finding support on a long-term ascending trendline from the March 2020 lows, pointing towards the 13,845 as the immediate support. A break below this area puts the bullish bias at risk, with long-term support expected to hold at 13,400 before a wider correction takes place.
Momentum indicators are showing a neutral stance with bullish bias with the stochastic hovering above the 50 line and the MACD trying to push into positive territory. If we continue seeing the price bounce off the ascending trendline, bullish momentum could build up in a new attempt to break the all-time highs around the 14,140 line.