DAX Stalls at Technical Crossroads Ahead of Earnings Deluge

German DAX gains 0.09% amid corporate earnings focus and Middle East tensions. ASML beats forecasts, SAP eyed for momentum, while sector performance diverges sharply.

The German benchmark index closed Wednesday at 24,067 points, a marginal gain of 0.09%, as investors found themselves caught between two powerful forces. Corporate earnings season is beginning to demand attention, yet geopolitical tensions in the Middle East continue to cast a long shadow, preventing any decisive move.

Earnings Take Center Stage

Market focus is pivoting sharply from headlines to hard financial data. The shift was underscored by ASML, the European semiconductor equipment giant, which kicked off the reporting cycle by surpassing first-quarter profit expectations. The company also raised its 2026 revenue forecast to a range of 36 to 40 billion euros, citing unbroken demand for AI-capable chip technology. The positive news, however, was met with some profit-taking.

All eyes now turn to SAP, a heavyweight in the DAX. The software giant reports on April 23, with analysts forecasting a revenue jump to 9.56 billion euros and earnings per share of 1.64 euros. A strong outlook from Walldorf could inject fresh momentum into the entire index. On Wednesday, SAP shares provided crucial support, rising 2.62% to help keep the DAX in positive territory.

Geopolitical Whiplash and Sector Divergence

The market's underlying nervousness stems from the Middle East. Initial relief followed US President Donald Trump's signals of a potential de-escalation in the Iran conflict and talks on opening the Strait of Hormus. This was quickly neutralized by fresh threats later in the day, illustrating the fragile sentiment.

This geopolitical friction is a clear brake on the DAX, contrasting with US markets where the Nasdaq Composite climbed to new records. In Europe, the EuroStoxx 50 fell 0.74%, dragged down by luxury stocks like Hermès (-8.2%) and Kering (-9.3%). The uncertainty is palpable in Germany, where an Ifo Institute survey found 78.6% of companies see their business development as highly unpredictable—the highest reading since February 2024.

Performance within German indices was mixed. While the DAX stalled, the MDAX and TecDAX posted stronger gains of 1.15% and 1.46%, respectively. Aixtron, a tech stock outside the main index, soared over 18% after raising its guidance. On the losing side, Deutsche Telekom slid 6.1% at the week's start following a JPMorgan warning about tougher US competition, and Mercedes-Benz fell nearly 2% amid sector skepticism.

A Tight Technical Squeeze

From a chart perspective, the DAX is navigating an extremely narrow band. Its current level is pinned almost exactly between two critical moving averages. The 50-day line near 23,993 points offers short-term support, while the 200-day average at 24,112 points caps recovery attempts. The Relative Strength Index (RSI) at around 48 indicates the index is neither overbought nor oversold, simply waiting for a catalyst.

A clear breakout from this corridor is needed to set the next directional move. A fall below the major support at 24,000 points risks a swift test of last week's low near 22,842. Conversely, a jump above last week's high of 24,163 would open the path toward 24,500.

The next major monetary policy impulse is not imminent, with the European Central Bank's next meeting scheduled for April 30. Until then, quarterly results from major tech and industrial firms, alongside the unpredictable rhythm of Middle East diplomacy, will dictate the market's tempo.