Hi Reader,

Executive Summary

As we approach the final trading week of Q1 2026, market sentiment is dominated by a distinct bearish bias across major asset classes. From the German DAX to the Euro and Gold, technical structures suggest that recent declines are not merely corrections but potential continuations of broader downtrends. However, short-term oversold conditions on the 4-hour charts present opportunities for tactical counter-trend bounces, provided strict risk management is applied.

The week is punctuated by high-impact macroeconomic data, most notably the US PCE Price Index on Friday, which will serve as the ultimate catalyst for volatility. With Q1 ending on March 31, institutional rebalancing flows may also introduce erratic price action.

DE40 (DAX): Bearish Continuation Dominates

The DAX is currently trading at 22,212.9, sitting precariously above a critical psychological support level at 22,000. The weekly and 4-hour charts confirm a primary downtrend, with price struggling below key moving averages.

Key Levels:

• Critical Support: 22,000 (Psychological + Structural Zone). A break here opens the door to 21,500.
• Immediate Resistance: 22,700–22,800 (Recent breakdown level).
• Major Cap: 22,994 (4H 18 EMA).

Trade Strategy: The highest conviction setup is a Short on Bounce. Traders should wait for a counter-trend rally into the 22,700–22,994 zone. If bearish rejection patterns (such as shooting stars or engulfing candles) appear on the 4-hour chart, entering short with a stop above 23,200 offers a favorable risk-to-reward ratio targeting 22,000 and potentially 21,500.

While a bounce from the 22,000 support zone is possible, it should be treated strictly as a counter-trend trade. Aggressive traders might look for a breakdown short if the 22,000 level fails to hold, targeting 21,500.

Macro Watch: Monday’s German Ifo Business Climate and Flash PMIs will set the tone. A weak reading could accelerate the bearish thesis, while a surprise beat might trigger a relief rally.

EUR/USD: The Battle at the 1.1600 Pivot

The Euro is trading at 1.1571, caught in a tug-of-war between a short-term 4-hour bullish bounce and a dominant daily downtrend. Having recovered roughly 29% of the decline from the February highs (1.2050), the pair is now testing a major resistance confluence.

Key Levels:

• Critical Resistance: 1.1575–1.1620 (S/R Flip + 38.2% Fib + Daily 18 EMA).
• Immediate Support: 1.1500–1.1520.
• Breakdown Level: 1.1375 (March Swing Low).

Trade Strategy: The primary bias remains Bearish. The 1.1575–1.1620 zone represents a high-probability rejection area. A short entry here, targeting 1.1500 and 1.1420, aligns with the broader daily trend. Alternatively, a tactical short could be taken on a pullback to the 4-hour EMAs (1.1530–1.1550) if price fails to hold above them.

Counter-trend longs are risky but viable if price dips to 1.1490–1.1520 and shows a strong reversal candle. However, these positions must be exited before hitting the 1.1630 resistance wall.

Macro Watch: The US Core PCE Price Index on Friday is the week’s most critical event. A “hot” print will likely crush the Euro, reinforcing the bearish trend, while a softer reading could fuel a deeper bounce toward 1.1650.

XAU/USD (Gold): Free-Fall Mode

Gold has entered a sharp corrective phase, plummeting from its February peak near 5,600 to current levels around 4,497. The daily chart displays a classic “double-top” reversal pattern, and the 4-hour structure shows accelerating selling pressure with no clear signs of capitulation yet.

Key Levels:

• Critical Support: 4,440–4,460 (Prior consolidation).
• Psychological Floor: 4,400.
• Broken Support (Now Resistance): 4,520–4,540.

Trade Strategy: The base case (55% probability) is Bearish Continuation. The preferred setup is a Short on Bounce into the 4,580–4,640 zone (near the 4H 9 EMA). A rejection here offers a high reward-to-risk entry targeting 4,440 and 4,400.

Aggressive traders may consider a breakout short if price decisively closes below today’s low of 4,477. While a “dead cat bounce” is possible due to oversold conditions, the density of overhead resistance makes sustained rallies unlikely without a major fundamental catalyst.

Macro Watch: Gold remains inversely correlated with the USD. Any strong US economic data (GDP, PCE) that boosts the dollar will likely weigh heavily on gold prices. Geopolitical escalations remain the only potential wildcard that could trigger a safe-haven surge.

Outlook & Risk Management

The week of March 23–27 is defined by the tension between technical oversold conditions and strong macro-driven downtrends. While counter-trend bounces offer opportunities, the path of least resistance remains lower for all three assets analyzed.

Critical Risks:

• Event Volatility: The US PCE on Friday could invalidate technical setups instantly. Reduce position sizes ahead of this release.
• Quarter-End Flows: Institutional rebalancing in the final week of Q1 can cause non-technical whipsaws, particularly on Friday.
• Geopolitics: Unforeseen developments in trade tariffs or global conflicts could trigger rapid risk-off moves.

Final Thought: Discipline is paramount. Stick to the defined levels, respect the stop losses, and remember that in a strong downtrend, “catching a falling knife” is a dangerous game. Wait for confirmation before entering counter-trend positions.

Disclaimer: This newsletter is for informational purposes only and does not constitute financial advice. Trading involves significant risk.