Support
DAX slides amid deteriorating consumer sentiment
The DAX index retreated as German consumer sentiment plunged to a lowest level since early 2023. GfK data highlights sharp declines in income and economic expectations driven by energy costs and Middle East instability. Despite these pressures, the DAX maintains a long-term bullish structure while testing critical moving averages.
The GfK consumer climate index fell to -33.3, missing consensus forecasts as rising energy prices and geopolitical concerns regarding the Middle Eastern conflict that weighs on the public consciousness.
Income expectations saw a precipitous drop from -6.3 to -24.4, while willingness to buy and general economic outlooks also suffered significant declines in the May revision.
While the DAX preserves its long-term upward trajectory, the index has entered a consolidation phase over recent months, signalling uncertainty regarding its next predominant directional move.
German GfK consumer climate deteriorates beyond analyst expectations
According to data released by the GfK Group, German consumer climate dropped to -33.3 for the May revision—the lowest level recorded since February 2023. This reading was weaker than the -29.5 level anticipated by the market consensus. An analysis by Trading Economics suggests that this deterioration is rooted in mounting inflation risks, exacerbated by the sharp rise in oil and natural gas prices. Furthermore, consumer sentiment reflects growing anxiety regarding the potential persistence and escalation of the US-Israel-Iran conflict. The report indicates that income expectations plunged from -6.3 in April to -24.4 in the May assessment. Similarly, economic expectations deteriorated from -6.9 to -13.7, while the willingness to buy fell from -10.9 to -14.4. Conversely, the propensity to save saw a marginal decrease from +18.5 to +16.1, although it remains firmly in positive territory.
In response to these figures, the DAX index dropped by 0.19% to 24,083 points. The German benchmark is currently facing multifaceted pressure, including rising inflation risks, protracted economic stagnation, and geopolitical instability that threatens global energy and food supply chains.
Figure 1. Germany GfK Consumer Climate (2016–2026). Source: Data from the GfK Group; Figure obtained from Trading Economics.
Technical analysis of the DAX index
From a technical standpoint, the DAX continues to adhere to a robust long-term bullish trajectory. The following observations detail the current market structure:
- Trend Context: The index remains entrenched in a long-term uptrend, defined by a structural sequence of "higher highs" and "higher lows". However, the price is testing its 50, 100, and 200-day Simple Moving Averages (SMAs). In the short term, momentum indicators suggest a sustained bullish impulse, though they are currently trading near overbought conditions.
- Resistance Levels: Should the current resistance at 24,700 be decisively breached, the next significant technical target is the historical peak of 25,400. A sustained move above this threshold would signal a potential extension of the bull market into uncharted territory.
- Support Levels: In the event of a technical pullback, the 24,000 level serves as immediate support, representing a confluence of the 50, 100, and 200-day SMAs and a trendline floor. If this level is invalidated, the next significant structural support is located at 23,280. A decisive breach of this area would notably heighten the probability of a deeper market correction.
- Momentum Indicators: Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are ascending from neutral levels, suggesting that short-term momentum may seek higher valuations. However, the RSI is currently trading in close proximity to overbought territory, suggesting a potential for near-term exhaustion.
Figure 2. DAX index (2025–2026). Source: Data from the Xetra Stock Exchange; Own analysis conducted via TradingView.
