DAX Index Daily Fundamental Forecast – August 1, 2017

The DAX index tried to make a run to the upside yesterday but was quickly met with a lot of selling and it fell back and finish the day lower than 12100 and looks pretty weak. The 12000 mark is likely to lend a bit of support due to the psychological factors but we do not believe that it would be enough to hold back the selling that is taking place in the index and we believe that this region would give way sooner or later.

DAX Unlikely to get any Respite

The stock markets in Europe have been moving steadily weaker and this has been happening both on good data and bad data as well. Any good data from the Eurozone is likely to make the process of tapering easy and also push the ECB towards the same, much quicker than anticipated, and this is something that the market hates. That is the reason we are seeing the DAX move lower on every piece of good data from the Eurozone. The selling in the DAX had begun a couple of weeks back, as the index moved below the 12550 mark and the selling has been going on relentless since then.

There have been only occasional bounces in the index and even these bounces have been used by the traders as a means of getting out of the markets and that is why we are seeing the bounces being quickly sold into and the index continuing to move lower over the last couple of weeks. This trend is likely to continue in the short and medium term and any bounce in the stock markets is likely to be used as an opportunity to sell.

Looking ahead to the rest of the day, we have the Manufacturing PMI and the Unemployment claims data from Germany but going by the happenings over the last couple of weeks, these 2 pieces of data are unlikely to have much of an impact in the selling which is likely to continue in the DAX.