DAX is slowing down and now attempting to break the support line of the impulsive channel drawn from the March swing lows, signaling that momentum is fading and a higher-degree correction may be unfolding. The current price action can be interpreted as a potential leading diagonal forming within wave (A), which often appears in early stages of a broader three-wave correction.
If this structure is confirmed, we should expect a continued three-wave (A)(B)(C) decline, although a temporary stabilization or corrective bounce in wave (B) is still likely before further downside resumes in wave (C). This would fit a typical corrective sequence where initial weakness is followed by a counter-trend recovery before continuation.
On the downside, the first key area of interest lies around the previous wave four support near 23,600. If selling pressure continues, a deeper move toward the 23,170–23,000 region becomes possible, where a major unfilled gap is located. Such gap zones often act as strong reaction areas and could eventually trigger a meaningful rebound once filled.
Despite the current weakness, this correction would still be consistent with a larger-degree bullish structure, where the broader expectation remains that the index could retest all-time highs later in the year as part of a higher-degree wave five advance on the daily timeframe.
If this structure is confirmed, we should expect a continued three-wave (A)(B)(C) decline, although a temporary stabilization or corrective bounce in wave (B) is still likely before further downside resumes in wave (C). This would fit a typical corrective sequence where initial weakness is followed by a counter-trend recovery before continuation.
On the downside, the first key area of interest lies around the previous wave four support near 23,600. If selling pressure continues, a deeper move toward the 23,170–23,000 region becomes possible, where a major unfilled gap is located. Such gap zones often act as strong reaction areas and could eventually trigger a meaningful rebound once filled.
Despite the current weakness, this correction would still be consistent with a larger-degree bullish structure, where the broader expectation remains that the index could retest all-time highs later in the year as part of a higher-degree wave five advance on the daily timeframe.
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