DAX at the Crossroads: Breakout or Blow-Off?

Weekly Target Hit, But Reversal Signals Suggest Another Leg Higher—Here’s What to Watch Next

Summary

The DAX (GER40) has reached a major long-term Fibonacci target at 138.2% on the weekly timeframe, a significant target level. While the long trend remains intact on the daily chart, a countertrend structure has emerged on the 4H timeframe. Bullish reversal signals within the correction suggest a potential trend continuation—provided a key structural confirmation unfolds.

Weekly Chart – Long-Term Impulse Hits Major Target

The weekly chart reveals a strong bullish impulse that has driven prices into new all-time highs. The move has reached the 138.2% Fibonacci extension of the previous correction—an important level where long-term traders may begin to reduce exposure or seek confirmation for continuation. The trend remains unchallenged as long as the market stays above the pivot at 23,607, with the next Fibonacci targets seen at 150% and 161.8%.

Daily Chart – Bullish Structure Still Intact

On the daily timeframe, the trend remains firmly bullish. Price is consolidating beneath the weekly highs, with the most recent price action forming higher lows and maintaining bullish market structure. The daily 138.2% Fibonacci target is now in sight, and alignment with the weekly objectives provides further conviction for the bulls.

The key invalidation zone is marked by the daily pivot (23,607), which also aligns with a weekly swing low. A breakdown below this level would signal structural weakness and invalidate the current bullish setup.

4H Chart – Reversal Signals Within Correction

The 4H chart shows a corrective phase with a visible countertrend line. However, within this corrective structure, three lower-wick candles have formed—classic signs of buyer absorption and a potential bullish reversal.

If the market reclaims the previous breakdown level (around 24,019), the countertrend line will be broken, and the 4H, Daily, and Weekly timeframes will align in the same direction. This alignment would mark a shift in momentum and open the door to the next upside targets:

• First target: H4 peak and H1 breakdown zone (around 24,300–24,400)

• Secondary targets: 4H Fibonacci levels at 24,450 and beyond

• Extended targets: Daily 138.2% and Weekly 150% Fibonacci at ~24,650–24,800

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Conclusion

The DAX is in a decisive technical position. While the long-term trend remains bullish and price has already met a significant target, a potential continuation setup is forming across multiple timeframes. Confirmation above the 4H countertrend and reclaim of the breakdown zone would signal trend resumption and put higher Fibonacci targets in focus.

However, any breakdown below 23,607 would invalidate the structure and expose the market to deeper corrections.

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