DAX Index Daily Fundamental Forecast – August 3, 2017

The DAX index corrected lower yesterday giving back most of the gains that it had made on the previous day. The dumping in the stock markets was mainly due to the fall in the oil prices which happened due to the build up in the inventory to a greater extent that what was expected. This fall in the oil prices affected the stock markets and they fell lower in Europe though the stock markets in the US continued to trade in a strong manner.

DAX Gives Back Gains

We had mentioned in our forecast yesterday that even though the DAX index had finished higher on the previous day, it was more of a correction of a down trend rather than any change in trend and those trading in the stock market would only view this bounce as an opportunity to sell, which is what we saw yesterday in the markets as the bounce was heavily sold into and the index closed below the 12200 mark once again.

Even though there may be bounces along the way,the bearish trend in the DAX is here to stay and this is going to be the norm in the short term as the market awaits what the ECB is going to do after the summer and also the German elections. Though Merkel is clearly in the lead, the experiences over the past 2 years has shown that anything can happen during the elections and that is why the investors are a bit reluctant to commit themselves on either side at this point of time.

Looking ahead to the rest of the day, we have the services PMI data from Germany later in the day but we saw the US stock markets close strong yesterday. Due to this, we expect the DAX to open strongly for today though again, we expect the strong opening to be sold into later in the day.