... Trade Reviews DAX advances amid robust trade surplus and receding oil prices

DAX advances amid robust trade surplus and receding oil prices

The DAX index rebounded today, bolstered by a stronger-than-expected trade balance and a significant decline in global oil prices. Improved sentiment in the Eurozone's largest economy provided a reprieve for equities, which have recently faced economic growth headwinds.

By Daniel Mejía | 8h ago

Germany's trade surplus expanded from €17.4 billion in December to €21.2 billion in January, outperforming market expectations despite a broader contraction in both export and import volumes.
Crude oil futures finished the session with a notable decline, fueling optimism that energy-driven inflationary pressures on the German industrial sector may be controlled.
While the DAX maintains its long-term bullish trajectory, price action is currently oscillating within a range-bound consolidation pattern, reflecting ongoing uncertainty regarding the market's immediate direction.

German trade balance surpasses analyst estimates

According to data released by the Federal Statistical Office of Germany, the trade surplus widened to €21.2 billion in January, significantly exceeding the consensus estimate of €15.2 billion. This figure represents the highest surplus recorded since August 2024 and suggests a potential inflection point following a year-long downtrend in trade figures. Although exports fell by 2.3% on a monthly basis, imports experienced a more aggressive contraction of 5.9%, thereby widening the trade surplus during the period under review. Consequently, the DAX index surged by 2.39% to close at 23,968 points, supported by this underlying structural resilience.

Figure 1. Germany Balance of Trade (2021–2026). Source: Data from the Federal Statistical Office; Figure obtained from Trading Economics.

The German equity benchmark was further supported by a sharp depreciation in oil prices. Brent crude futures—the primary benchmark for European markets—plummeted by approximately 11% following remarks from US President Donald Trump indicating that the conflict involving the US, Israel, and Iran may be nearing to ending. Furthermore, reports from Reuters suggest that the US administration is considering the removal of certain restrictions on Russian oil. A cessation of hostilities or the re-entry of oil flows from major exporters like Russia could significantly alleviate the supply disruptions currently exacerbated by the closure of the Strait of Hormuz.

Technical analysis of the DAX index

From a technical standpoint, the DAX continues to adhere to a long-term bullish trend. However, a detailed examination of the current market structure reveals several critical nuances:

Trend Context: The index remains in a secular uptrend, defined by a consistent sequence of "higher highs" and "higher lows". Nevertheless, the price is currently trading below its 50, 100, and 200-day moving averages as it fluctuates within a consolidative range. In the short term, momentum indicators are trending lower, suggesting a gradual increase in bearish strength within this sideways phase.
Resistance Levels: Should the current record high of 25,420 be breached, the next significant technical target is projected at 26,150, based on a rectangle pattern extension. A sustained move above this threshold would signal the continuation of the bull market into uncharted territory.
Support Levels: On the downside, the 23,100 level serves as immediate support. If this level is invalidated, the next structural floor is located at 21,000 (an upward channel floor). A decisive breach of the 21,000 area would significantly heighten the probability of a more profound market correction.
Momentum Indicators: Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are currently positioned at neutral levels. However, both indicators are printing a series of "lower highs," signalling a potential divergence that may weigh on short-term price action.