DAX Daily Fundamental Forecast – February 14, 2017

The DAX finally managed to have a strong and bullish day yesterday but it still has not been able to cross the major hurdle at 11900. We have been mentioning in our last few forecasts that the DAX has slowed down a lot in its bullish run and it was not even responding to the successive up days in the rest of the stock markets around the world, which have been making some successive highs over the last couple of weeks. The index had clearly taken a pause and this had caused some worries in the bullish camp as there was no follow through on the bullish run that they had seen over the past couple of months.

But the price action over the last couple of days should have made the bulls happy as the DAX bounced off from its support region around the 11400 region and has since gone on beyond 11600 and is now threatening to break through the 11800 region. With the US stock markets continuing to post all time highs and with the risk on sentiment clearly evident in the markets as they get used to Trump and his ways, we should slowly see those effects percolating into the DAX as well and thats why we have been seeing this next leg of the bull run. But, on the other hand, unless the strong resistance around the 11900 region is broken, the DAX is going to continue to trade within the larger range and the bulls need to be careful that they dont get carried away.

Looking ahead to today, we do not have any major news from Germany but we have the Fed Chief Yellen talking about the monetary policy and the markets will be looking forward to her to see whether she sounds bullish or bearish about the US economy. A bullish undertone would be useful to keep the risk sentiment going on and this should push the DAX higher further towards our target of 12000.