DAX Deep Correction Approaches Key Support As Bullish Ending Diagonal Remains Possible

DAX is making a very deep retracement on the 4-hour time frame, but the current decline could still be part of a larger corrective structure. Notice that the move appears to be developing from a triangle, which, if correct, would suggest that we are now dealing with wave C of a corrective decline from the August highs. In this case, the 24,600 area should be watched as the first important support, while the 24,000 area could also become relevant, especially if wave C reaches the equality target with wave A.

So, for now, there is still room for further weakness, and we should not assume that the correction is already complete. At the same time, the bigger picture still leaves room for the market to stabilize later on, potentially after completing this wave four correction within the possible ending diagonal shown on the daily chart. If this structure is correct, DAX could still have a fifth wave higher once the current correction is finished.

This broader bullish scenario remains valid as long as DAX trades above the trend line connecting the April 2025 lows. Therefore, while the short-term structure remains corrective and downside levels should be respected, a recovery back above 25,664 would be an important signal. If that breakout is supported by impulsive price action on the smaller time frame, it would provide stronger confirmation that bulls are stepping back in and that the next leg higher could be starting.