DAX potentially gearing up for a big breakout soonWith all major risk events now out of the way for the year, can we finally see the German DAX come out of its multi month consolidation in the days ahead? Recent price action has been bullish, albeit inside a wide consolidation range. But the downside has been limited and that gives the bulls the confidence needed to stick around and await a potential breakout in the coming weeks. The lengthy consolidation near record highs is usually a positive sign as it shown the buying pressure is building while the sellers haven't made any major ground. But rather than pre-empting it, let's wait for a clean breakout first, so this is one to watch for the holiday period and into early parts of 2026.
Germany's record fiscal spending is likely to give Europe's largest economy a major boost, which could then lead to further stock market gains. Well that is the hope anyway.
Key levels highlighted on the chart.
By Fawad Razaqzada, market analyst with FOREX.com
