DAX Index Daily Fundamental Forecast – August 18, 2017

As expected, the DAX index moved lower yesterday as the global stock rally began to fizzle out under too much pressure from many sides. Even when the rally was happening, we had mentioned that the rally looked more like being corrective and once the current drivers of the rally are gone, then we should start moving lower once again and that is the same that we saw yesterday.

DAX To Come Under Pressure

The index broke back through the 12200 and move lower and closed the day just above the 12100 mark and continues to look very week. We may see the index move back down through the 12000 region in the short term and continue to stay weak. Yesterday, we had a terrorist attack in Spain and this has increased the global risk by several notches and led the stock markets in the US to have a large crash.

The European markets did not have too much time to react to this development and so we may see the full reaction only today. With this being the last day of the week, we may see some profit taking as well and a combination of these two should be enough to drive the DAX through the 12000 mark by today. We  expect a very weak opening to the DAX today and that theme is likely to carry on for the rest of the day as the markets come under the next round of global risk. It was the tension between North Korea and the US last week and after a brief recovery, we are likely to see another round of increase in the global risk sentiment which will put the pressure again on the stock markets.

Looking ahead to the rest of the day today, we do not have any major news from Germany or the Eurozone for today but the global risk factors are likely to dominate the DAX for today and keep it under a lot of pressure which is then likely to bring 12000 back into the picture.