DEU40 Elliott Wave Analysis: DAX Wave (v) Completes Near 25,900 — Correction Targets 23,405
The German DAX has just delivered one of the most structurally precise Elliott Wave sequences visible in global equity indices right now — and the completion of that sequence is sending a clear signal. From the March 2026 structural low near 21,863, DAX traced a textbook five-wave bullish impulse including a picture-perfect contracting triangle in Wave (iv) before Wave (v) completed the advance near 25,900. With the five-wave sequence now finished, the corrective phase is underway — and the Elliott Wave targets of 23,881 and 23,405 define the structural roadmap. Here is the complete breakdown.
Elliott Wave Analysis: Where Is DEU40 Right Now?
Critical Levels and Wave Count
The DEU40 H4 Elliott Wave story for 2026 begins at a significant structural low. The large-scale C-wave bottom printed near 21,863 in late March 2026 — the terminal point of a multi-month corrective decline from the February B-wave high near 25,507. This C-wave low established the foundation for the new bullish impulse sequence that would follow.
From the 21,863 structural base, a five-wave bullish impulse unfolded across April, May, and June 2026 with exceptional structural precision:
Wave i: The initial impulse from the C-wave low, internally subdividing into (i)-(ii) sub-waves as price rallied from the 21,863 base toward the first significant high. The i-wave established the directional bias and confirmed that the C-wave correction was genuinely complete.
Wave ii: The corrective retracement following Wave i, pulling price back toward the ii low before the most powerful advance of the sequence began. Classic shallow-to-moderate retracement character.
Wave iii: The most extended and powerful wave of the entire impulse, subdividing internally through the iii level on the chart before the sub-wave progression drove price toward approximately 24,800–25,000. Wave iii of this sequence showed the explosive upside momentum characteristic of third waves in major equity index impulses.
Wave (iv) — Contracting Triangle: One of the most textbook Elliott Wave patterns visible in the DEU40 chart. Wave (iv) formed a five-legged contracting triangle (a-b-c-d-e):
a leg: Pulled back from the Wave iii high toward approximately 23,700
b leg: Rallied back toward approximately 25,300 (labeled as b on the chart)
c leg: Corrected to approximately 23,900 — forming a higher low relative to (a)
d leg: Rallied toward approximately 25,100 — forming a lower high relative to (b)
e leg: The terminal wave of the triangle, pulling back to approximately 24,200 — completing the entire contracting triangle and triggering the Wave (v) thrust
Contracting triangles as fourth waves are among the most reliable Elliott Wave patterns. The converging trendlines, the five-leg structure, and the (e) wave termination within the triangle's boundary all confirm the structural integrity of this Wave (iv).
Wave (v) — COMPLETE: Following the (e)/(iv) triangle completion, the Wave (v) thrust drove DEU40 from the triangle base all the way to approximately 25,900 — the (v) terminal high marked on the EWPlans chart. This (v) wave completes the entire five-wave bullish impulse sequence from the 21,863 C-wave low.
Corrective Structure — NOW ACTIVE: With the five-wave impulse complete at the (v) high near 25,900, a corrective structure has begun. Current price at 25,045 as of July 8, 2026, is already 855 points below the (v) high and declining. The corrective targets, defined by Fibonacci retracements of the entire five-wave advance from 21,863 to ~25,900, are:
TP 1 → 23,881 (0.5 Fibonacci retracement)
TP 2 → 23,405 (0.618 Fibonacci retracement — primary target)
The Contracting Triangle (iv) — Why It Elevates This Setup
The Wave (iv) contracting triangle deserves specific attention as a structural feature that significantly increases confidence in the Wave (v) completion and subsequent corrective thesis.
In Elliott Wave theory, contracting triangles in Wave (iv) position carry several important implications:
1. They confirm the preceding Wave (iii) as genuine. A properly-formed contracting triangle in Wave (iv) can only occur after a clear Wave (iii) impulse — they don't appear in corrective contexts. The DAX triangle confirms that Wave (iii) was a legitimate third wave of a genuine five-wave sequence.
2. They define the Wave (v) thrust direction and minimum target. In Elliott Wave, the thrust following a triangle is expected to equal the widest part of the triangle in length. The DAX triangle's width provided a minimum target for Wave (v) that was met and exceeded at the 25,900 high — confirming Wave (v) completion.
3. They mark the penultimate wave. A contracting triangle in Wave (iv) signals that only one more wave (Wave v) remains in the current impulse sequence. Once Wave (v) completes, the entire impulse is finished and the corrective phase begins. This is exactly what has occurred in the DEU40 structure.
4. (e) wave precision as structural confirmation. The (e) leg of the triangle terminating precisely on the lower triangle trendline before the (v) thrust began is a textbook confirmation signal — increasing confidence that the triangle structure was properly formed and the subsequent (v) wave was the final leg.
Expected Scenario and Potential Moves
The primary Elliott Wave scenario for DEU40 is clearly defined: the five-wave bullish impulse from 21,863 is complete at the (v) high near 25,900, and a corrective structure is now retracing toward the mapped Fibonacci targets.
TP 1 at 23,881 (0.5 Fibonacci retracement) is the first corrective target — representing a decline of approximately 2,019 points from the (v) high. This is the moderate retracement reference that a normal corrective wave would be expected to reach.
TP 2 at 23,405 (0.618 Fibonacci retracement) is the primary corrective target — representing a deeper retracement of approximately 2,495 points from the (v) high. The 0.618 level is the most common retracement depth for corrective waves in equity index structures and carries the highest structural probability as the completion zone for this correction.
The corrective structure itself will likely develop as an A-B-C three-wave pattern:
A-wave drives the initial corrective decline toward TP 1
B-wave produces a counter-trend bounce
C-wave completes the correction near TP 2 at 23,405
Key structural milestones to monitor:
25,900: (v) wave completion high — now key resistance
25,507: Prior B-wave resistance — secondary reference
25,045: Current price — corrective decline in progress
23,881: TP 1 — 0.5 Fibonacci retracement
23,405: TP 2 — 0.618 Fibonacci retracement (primary target)
21,863: C-wave structural low — long-term floor
Strategic Perspective for Traders
The DEU40 H4 Elliott Wave setup provides a comprehensive structural framework for navigating the German equity benchmark at this pivotal moment:
1. The contracting triangle + Wave (v) completion = highest-confidence corrective signal. The combination of a textbook Wave (iv) contracting triangle followed by a clear Wave (v) thrust to 25,900 represents one of the most reliable Elliott Wave terminal signals available. When the structural sequence is this complete and precise, the corrective thesis that follows carries elevated analytical confidence.
2. The 23,405 target (0.618 Fib) is the primary structural objective. In equity index Elliott Wave analysis, 0.618 retracements of prior impulses are among the most common and reliable corrective endpoints. The confluence of the 0.618 Fibonacci level with the DEU40 corrective structure makes 23,405 the highest-probability completion zone for this correction.
3. Current price at 25,045 suggests the correction is in its early stages. With approximately 1,640 points of decline required to reach TP 2 from the current price, and the correction only recently initiated from the (v) high near 25,900, the bulk of the corrective move may still be ahead. This creates a well-defined structural opportunity for traders who understand the wave context.
4. ECB policy and German macro are the primary override variables. DAX is uniquely sensitive to European Central Bank monetary policy decisions. Any surprise dovish pivot — such as accelerated rate cuts or expanded asset purchases — could compress the corrective wave and push price back toward the (v) high. Similarly, stronger-than-expected German industrial or trade data could act as a near-term bullish catalyst. Monitor these developments alongside the wave count.
5. The 21,863 C-wave low is the long-term structural anchor. Whatever the depth of the current correction, the March 2026 C-wave low at 21,863 represents the long-term structural base. A return to the 23,405 correction zone — well above the C-wave low — would keep the broader bullish structure from 21,863 fully intact and potentially set up the next major bullish impulse from structurally significant support.
Conclusion — Follow DAX's Wave Structure With EWPlans
DEU40 has delivered a textbook Elliott Wave five-wave impulse — complete with a contracting triangle fourth wave and a clean terminal fifth wave near 25,900. The corrective phase is now active, the 0.618 Fibonacci target at 23,405 is the structural destination, and the EWPlans wave map provides the clearest available framework for navigating the German equity market through this corrective sequence.
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