DAX Index Daily Fundamental Forecast – January 30, 2018

The DAX index corrected lower during the course of trading yesterday as the index finally seems to have lost touch with the euro. There had been a lot of inverse corelation between the 2 over the last few days with the euro moving higher and the index moving lower and vice versa but that seems to have broken yesterday.

DAX Corrects Lower

We saw the index move lower along with the euro and this correction was not restricted to the DAX alone as this was seen across all the important global markets around the world. This seemed to be a part of the correction and it is more like a lot of traders trying to take off some profits from the table after the large bull run that we have been seeing in many of these markets over the last month or so.

Also, it has to be noted that we are nearing the end of the month and so the traders have to deal with option expiries and month end flows and large investors trying to roll over their trades and positioning themselves for the new month ahead. That is why it is not safe to determine the trend of a market depending on how it acts during the last few days of the month and take all the price action during this period with a pinch of salt. The index corrected lower yesterday and fell through the 13300 region again but continues within the larger range so far.

Looking ahead to the rest of the day, we do not have any major news from Germany but expect some remnants of the bearish move from yesterday, to continue for today as well and this is likely to keep the index under pressure for most of the day today. The region around 13150 is likely to act as a technical support for the time being but it remains to be seen how long this would hold. On the other hand, the prospect of some deal being born out of the coalition talks within the next few days should lend some support to the index.