DAX Index Daily Fundamental Forecast – March 6, 2018

The DAX index continued its recovery during the last 24 hours as the index pushed through the 12100 region and continued moving higher as the global risk sentiment improved despite the actions from the US government. We had mentioned as much in our forecast yesterday where we said that the region around 11800 is likely to act as a strong support which could lead to a rebound.

DAX Rebound Continues

It is this rebound that we are seeing and this is expected to continue in the short term. We are looking for the rebound to continue in the short term though the action of the US administration to impose tariffs on the import of steel and aluminium is the one that is dominating the market headlines over the last several days. This is only likely to get worse as Trump has tweeted that he is mulling extending this to other metals as well and this is going to keep the markets on tenterhooks.

We have also been seeing their neighbours and countries like China threatening to retaliate in kind and it is looking as though we might have to see this escalate and bring in a lot of risk and uncertainty. But the US stock indices rose late in the day yesterday which should help the DAX to open in a strong and steady manner for today. This should help the recovery to continue further but we believe that any sort of recovery would be capped at the highs of the range that we have been seeing over the last couple of weeks as there has been no momentum from the index so far.

Looking ahead to the rest of the day, we do not have any major economic news or data from the Eurozone or Germany and so we can expect consolidation with a bullish bias as the market awaits further data from the US and the ECB later in the week which should lay the foundation for the short term trend.