DAX Index Daily Fundamental Forecast – July 12, 2017

Yesterday, we saw the DAX index make a quick trip to the broken support region of 12550 and as expected, the move failed and the index fell back below 12500 during the course of the day. The price action so far has been as expected and as per what we have been mentioning in our forecasts over the last few days. The index is under the control of the bears who have ensured that the index continues to stay under pressure and that is why we are seeing the index in a consolidation and ranging mode over the last few days.

DAX Unable to Break Rut

The key was the break through the 12550 region and though the index has recovered over the last few days and trades just below 12500, the weakness in the index is clear for everyone to see. The occasional statements and reports from the ECB that say that the tapering could be delayed have brought in only short bounces that clearly do not have any force behind them and the move from yesterday towards 12550 was one such.

That move has been quickly reversed, as has been the case with any kind of bounce over the last few days and across Europe, we are seeing the stock markets under pressure as the picture becomes clear on how the Eurozone economy is strengthening and how this could lead the ECB to start tapering sooner or later. This would mean the pulling out of funds from the market and this has made the investors jittery and the stock markets would be the last place they would want to invest in, under such circumstances. Hence, we are seeing a slow pullout of the funds from the investors from the DAX and that is the reason behind the bearish consolidation.

Looking ahead to the rest of the day, we do not have any major news from the Eurozone and so we can expect this consolidation to continue which should delight the day traders.