DAX Index Daily Fundamental Forecast – February 28, 2018

The DAX corrected lower yesterday on the back of declining risk sentiment. This is something that we had mentioned in our forecast yesterday where we had said that the investors and traders could not hope for the rebound to continue for too much longer. Accordingly, the index had corrected lower and now trades below the 12500 region as of this writing and it is likely to continue to be weak in the days ahead.

DAX Under Pressure Again

The DAX had been trading in a steady manner since the beginning of the week and the improvement in the global risk sentiment had helped the index to move higher. But this move higher had been slow and steady and had lacked a lot of momentum and that is one of the reasons why the move higher had looked more corrective rather than a reversal of the down move which happened a couple of weeks back. This is also the reason why we had said that the index is likely to move lower once the corrective phase got over.

The stock markets in Europe are clearly under pressure, despite improving data from the Eurozone and Germany as well and this is due to the pressure exerted on the investors by the prospect of the QE coming to an end in the months ahead. So, we believe that in the medium term, the indices are likely to continue under pressure and the downtrend is likely to continue. Of course, bounces would be possible but each of these bounces should be used as an opportunity to go short on the DAX.

Looking ahead to the rest of the day, we do not have any major economic data from the Eurozone apart from the flash CPI data which usually does not have much of an impact on the index. We expect the DAX to continue to trade in a weak manner and then consolidate at the lows as the ranging continues.