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DAX Fundamental Analysis – week of October 3, 2016 – Forecast

By:
Colin First

The DAX had a bullish close to the week, though it didnt appear so even till last Thursday. The stock markets all around the world and especially in

Dax

The DAX had a bullish close to the week, though it didnt appear so even till last Thursday. The stock markets all around the world and especially in Germany got the jitters over concerns with the situation in Deutsche bank. There were rumors swirling around about what could have happened and this spooked the markets and caused a risk-off sentiment all across the stock markets.

This situation became strong on Wednesday but though it did not die down, these continued to be rumors and there was no news or events to support these. As this continued through on Thursday, the confidence that the situation wasnt as bad slowly returned to the markets and this was fully reflected during the second half of the day on Friday which enabled the DAX to close strongly at 10530, just below its weekly high of 10580. It didnt appear so when the DAX was correcting duruing mid week towards 10180.

Looking ahead, the forthcoming week does not have any major news out of the Euro region as such but it being the first week of the month, there is going to be a host of major news from all other parts of the world including the US, UK and Australia. As usual, the NFP from USA on Friday is likely to be the major market mover as traders look towards a strong jobs report to support their view of a rate hike this year. This could cause a weakening of the stock market as this could lead to pulling out of funds from the stock markets around the world.

DAX Weekly
DAX Weekly

Technically, the DAX index looks bullish for the forthcoming week as the finishes over the last 2 weeks have been pretty strong. This supports the bullish view and a clean break of 10580 could then pose a challenge to the sellers at 10780 which could be a major wall of resistance. We believe that there would not be enough ammunition as yet to break through this wall and we could then see a correction once again towards 10400. All in all, a ranging week is what is expected for the DAX between the range high at 10780 and low at 10180.

About the Author

Colin specializes in developing trading strategies and analyze financial instruments both technically and fundamentally. Colin holds a Bachelor of Engineering From Milwaukee University.

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