DAX Index Daily Fundamental Forecast – June 27, 2017

The DAX index began very strongly on the first day of the week yesterday and for a brief while, it threatened to break through 12900 and maybe make an attempt at the highs again but alas, it proved to be a failure and it corrected during the second half of of the day and closed the day below 12800 once again, leaving the bulls to do all the work once again today.

DAX Awaits Some Push

The European stock markets began on a positive note yesterday on the back of news that the Italian government had prepared a plan for the 2 banks that were in trouble. This not only ensured that the 2 banks and their clients were saved, it also showed that the Italian government had enough resources to fix the problems in its banking system. This was a positive for the markets and the Italian index rose on this news and the effect of this rubbed off on the other European stock markets including the DAX which started the day higher and continued higher through 12800.

But this move upwards did not last long as reality began to set in and a lot of selling also began to rush in. This is something that we have seen happen many times over the last few months where any attempts to generate the next leg of the bull run has always been met with a lot of selling and despite a lot of effort, the bulls have found it very difficult to mount any kind of a serious challenge to the 13000 mark. This was the same case yesterday and the selling forced the index to move below 12800 and it closed the day below that region.

Looking ahead to the rest of the day, we do not have any major news from Germany but we have a speech from Draghi that could impact the European markets. But we do not think that there would be anything in the short term that would help the DAX index to break through its current range just as yet.