DAX Index Daily Fundamental Forecast – March 28, 2018

The DAX index managed to recover further during the course of the last 24 hours but it remains to be seen how long this would happen considering the fact that the US markets dropped towards the end of their trading session and the Asian markets have also been following suit as of today morning.

DAX Likely to Drop

The DAX has been able to recover as the risk sentiment around the world improves after the pounding that the market had received last week. The move lower had been caused due to the fact that the US had announced tariffs and this has led to fears that there would be a breakout of a global trade war but as the weekend wore on and the new weeks began, those fears have begun to recede as there has not been much follow up action from the other countries and it has been a lot of talk with not much of action in the markets.

But we believe that this is only going to be a temporary lull in the markets and the fear and the uncertainty is going to return to the markets as the US continues to follow its nationalistic policies and this is only going to encourage others to do the same as well. This is not good for any economy and that is why we believe that this move higher and this rebound is only going to be temporary. As a confirmation of that, we have seen the tech shares slip in the US as the investigation and castigation of FB grows over there and this is likely to get reflected in the other markets as well.

We believe that the DAX would open the day in a very weak manner and this weakness is only going to get worse as the day progresses. With the lows of the range nearby, we are likely to see the index on the backfoot for most of the day and the lows should come under serious threat pretty soon.