DAX Index Daily Fundamental Forecast – August 8, 2017

We had mentioned in our forecast yesterday that the DAX was likely to begin the day in a strong manner as the US stock markets had closed pretty strongly on Friday on the back of a good US jobs report. We had also mentioned that this bounce in the index was likely to be sold into and thats exactly the same price action that we witnessed in the DAX index yesterday as we saw the index bounce higher and then this bounce was promptly sold into.

DAX Likely to Stay Weak

This bounce in the DAX pushed the index beyond the 12300 mark but this lasted for a short while only as the index was sold heavily from that point onwards and this pushed the index below the 12300 mark again and it trades in the middle of this range to close the day. We expect the weakness in the DAX to continue for the short term and with the upcoming elections in September, it is likely that the investors and the traders would be reluctant to push the index in either direction at this point of time.

Already the DAX has been hit due to all the tapering talk and even the good data out of Germany in recent times has not been able to lift the index due to the fact that any good data is only likely to increase the tapering talk. Yesterday we saw the factory orders come in strongly in terms of quarter by quarter data and even this was not enough to sustain the bounce for a long time in the DAX as the fears of tapering arriving soon pushed the index down.

Looking ahead to the rest of the day, we have the German trade balance data a bit later in the day but as we had pointed out, the reaction from the variety of news has been choppy and we continue to believe that the trend is down for the short term as far as the DAX index is concerned.