DAX Index Daily Fundamental Forecast – July 18, 2017

The DAX index corrected lower over the last 24 hours as the euro continued to strengthen and this brought about a weakness in the stock markets all around Europe. It has become a tendency for the stock markets to weaken whenever there is a uptrend in the Euro and in this time, it is very clear for all of us to see. The index is now very close to the support region of 12550 and hence we are likely to witness some choppy trading.

DAX Likely to be Choppy

We had mentioned in our forecast yesterday that despite the fact that the index had managed to clear the broken support turned resistance at 12550, it is still likely to be under pressure due to all the talk of tapering and also due to the upcoming elections in Germany in September which would be a risk event as far as the DAX is concerned. With the absence of any major news over the weekend, the tapering talk once again dominated the markets and this helped to push the indexes down.

The DAX is expected to continue under pressure in the short and medium term and though the bulls appear to be in control for now, this is not the time for them to relax as the the situation might change anytime. Also, it remains to be seen how the tapering story from the ECB pans out during the course of the week. If the ECB sticks to its guns, then we could see the index moving lower while on the other hand, if the ECB refutes any kind of tapering, then it is likely that we will see a relief rally in the DAX.

Looking ahead to the rest of the day, we do not have any major news from Germany and hence we are likely to see some consolidation and choppy trading over the next 24 hours.