DAX Index Daily Fundamental Forecast – August 30, 2017

The DAX index crashed yesterday as the back of high global risks as this was the case with the stock markets all around the world. Asia woke up to the news of a missile test from North Korea but this time, the situation seemed to be a bit more serious as the missiles passed very close to the region of Japan. This led to an escalation in the tension between the countries and as a result of that, the gold prices shot up.

DAX Crashes on Increased Global Risk

The prices of gold usually go up when funds get pulled out of the stock markets and get invested into safe havens like gold and this is what we saw yesterday as the Asian stock markets also crashed. This pretty much laid the foundation for a bearish move in the DAX and it opened weak and continued to trade in a weak manner through the course of the day.

The index broke through the important support region around 12000 and continue lower into the 11800s before buying began to come in. Also, the global tensions eased a little as the US session kicked in and we saw the US and the UN handle the situation in a dipolomatic manner which further helps to ease the global risk. This helped the DAX to recover late in the day but that was not enough to push the index back through 12000 which is likely to serve as a strong resistance going forward.

Looking ahead to the rest of the day, we have the Germany Preliminary CPI which is likely to lend some support to the DAX if it comes out stronger. Also, with the further easing of tension and risk, we might see the DAX index open in the green for today though it remains to be seen whether it can continue to do so for the rest of the day.