DAX breaking 7-month consolidation

DAX Weekly Outlook – Consolidation Breakdown in Progress

The DAX has been moving in a broad 7-month consolidation range, showing neither a clear uptrend nor a downtrend. Such long consolidations often act as distribution zones, where smart money gradually exits positions before a larger move begins.

Consolidation Breaking on the Downside

This week, the index is attempting to break below the lower boundary of this consolidation range. A downside break after months of sideways action is usually a strong bearish signal, especially on higher timeframes like the weekly chart.

Key Level – 23,000

The 23,000 zone is the critical level to watch:

If the DAX gives a weekly close below 23,000,

And we see follow-up selling next week,

…then it would strongly suggest that the distribution phase is complete, and the index may begin a sustained downward journey.

What This Means

A confirmed breakdown from multi-month consolidation often leads to:

Increased volatility

Trend acceleration

Deeper corrections toward the next major demand zones

For now, the weekly close will be crucial. A weak closing would confirm bearish sentiment and open the path for further downside.