DAX Index Daily Fundamental Forecast – August 9, 2017

A combination of soft data from China and and the increase in global risk levels has led to a drop in the DAX index over the last 24 hours. For our readers, it would have been expected price action as we had mentioned many times over that any kind of bounce in the DAX is only an opportunity to sell the index as the DAX continues to look weak with no signs of recovery atleast until the elections in Germany in September.

DAX Weakens as Global Risks Rise

Yesterday, we saw the global risk rise by a notch or two as North Korea and the US continue to engage in a war of words with Trump launching a tirade against North Korea and they responded with a threat to attack Guam. All these generally does not bode well for the markets and this usually leads to pulling out of funds from the stock markets and these funds then find their way into safe havens like gold and silver. This is what we saw yesterday as the bounce in the DAX in early trading was quickly sold into and the index corrected below 12300 once again and it is likely to continue to be weak in the short term.

We had mentioned of a similar action yesterday and the prices have followed the template so far. On the other hand, we saw the US stock markets also get worried about the rising global risks and the US stock indexes also corrected lower. This is likely to have an impact on the DAX when it opens for the day today and so we expect a lower opening for the DAX today and it is likely to continue to trade near the lows of its range.

Looking ahead to the rest of the day, we do not have any major news from Germany for today but the risks and the fears from yesterday and likely to get carried over today and keep the DAX index under pressure.