DAX Index Daily Fundamental Forecast – August 29, 2017

The DAX index moved lower yesterday as the stock markets, especially the ones from Europe, suffered from the speech of Draghi on Friday and moved lower. This was a day when the London market was closed on account of a holiday but with the market opening back today, we expect some more pain in the DAX for today as well. The index opened lower yesterday and through the course of the day, it corrected back to cover the opening gap and then fell again through the end of the day.

DAX Likely to Continue Under Pressure

The weak opening and the weak performance of the DAX index was quite anticipated after Draghi refused to touch upon the strength of the Euro and in a way, indicated that he was fine with a strong euro which in turn was an indication that the tapering of the QE was on its way quite soon. Though he did mention that there was a lot of strength in the eurozone economy as well, this part of the news was largely ignored as the market chose to focus on the initial part of the speech and pushed the euro higher.

This was dovish for the European stock markets and the DAX traders got a chance to show their reaction yesterday which they did by selling the index. The selling has not been of a large scale as yet and the index continues to range between the 12000 and 12350 price regions and this is expected to continue into the new month when the German elections are scheduled to take place.

Looking ahead to the rest of the day, we do not have any major economic news from the Eurozone or Germany but with the increase in global risk, due to another missile test from North Korea, we expect the DAX to open in the red once again and continue to remain under pressure during the course of the day.