DAX Index Daily Fundamental Forecast – August 7, 2017

The DAX index has managed a slight recovery on the back of a strong NFP report which points to a recovery in the dollar and general risk on mode in the markets The dollar had been on the backfoot over the last few weeks on the back of weak economic data which had pointed to a slow down in the global economy but with the data coming in stronger on Friday and with the data for last month also being revised higher, all seems to be well with the world once again.

DAX Bounces Strongly

The DAX broke through the 12200 region and close near its range highs just below the 12300 region and this is similar to the highs that it had achieved earlier in the week. At that time, the bounce had been quickly reversed the next day but this time, it remains to be seen whether the bulls would be able to hold the bounce. Considering the fact that the recovery in the dollar might continue, we should expect the same kind of recovery in the DAX when the market opens today.

The tapering talk does continue to dominate the European stock markets but with that being delayed to beyond summer, we are likely to see the markets react to more recent numbers like the NFP. We expect the 12350 region to act as a strong resistance when the DAX opens today and if the bulls are not able to break through this region, then we can expect some more correction towards the end of the day.

Looking ahead to the rest of the day, we have the German Industrial Production data that will be released a bit later in the day but we expect a buoyant opening to the DAX index for today which should then lead to some consolidation and ranging with a bearish bias later in the day.