The DAX index has continued to struggle to generate any kind of momentum to the upside since the beginning of the week. The more that the index takes time to move to the upside, the more is the risk for the index to find more and more sellers over the next few days and this will only add to the pressure for the index.
DAX In Danger
The index has been having a tough time in general over the last few weeks, despite the good incoming data from the Eurozone as the time for the ECB to act on the QE gets more and more near. We expect the tapering of the QE to begin towards the second half of the year and the QE is likely to be fully ended by the end of this year. The ECB is also expected to hike rates in the next year and all this is not very good news for the DAX. The DAX is going to struggle to find buyers if and when the QE is ended and this is why the investors are on the sidelines.
As if this was not enough, we have the news and the reports of tariffs being imposed by the US and China on the goods from each other and this has been adding further to the risk and uncertainty around the world, which is causing many of the stocks to crash around the world. Though there has been a temporary respite to the selling, we are sure that more selling is only around the corner and this is going to cause a lot of pressure on the support regions in the DAX.
If the support region breaks, then we are likely to see the index move much lower in due course of time and the bulls would be looking for some kind of support from somewhere to avoid this from happening but so far, there is none in sight.