DAX Index Daily Fundamental Forecast – August 28, 2017

The DAX index continues to consolidate and this has been continuing over the last couple of weeks as the index seems to be stuck in a tight range. We do not find any drivers for the stock indexes in recent times and even the speech of Draghi did not enthuse the markets too much and so we expect the consolidation to continue in the short term.

DAX Likely to Stay Low

Draghi had disappointed the markets very late in the day on Friday as he did not add much to what was already known by the markets. He basically repeated that the economy in Eurozone was doing well but the inflation rates were yet to catch up, something that was already well known by the traders. This did not stop the euro from flying away but it is unlikely that the stock markets would treat that in such a kind manner. We expect the DAX to react in a negative manner and this could lead to some pressure on the index.

The traders were expecting some policy change statements from Draghi and some more information about the timelines for the tapering and some hints about it but none of it was forthcoming the ECB President. This is likely to disappoint the European stock markets today though it is likely that with the London markets closed for holiday, the reaction might be lesser than what one would normally expect. Despite this, we believe that the DAX index would continue to move between 12000 and 12350 in the short term and this is likely to continue till we approach the German elections.

Looking ahead to the rest of the day, we do not have any major news from Germany and so we can expect the DAX to open low and continue to trade in a weak manner during the course of course of the day.