DAX Index Daily Fundamental Forecast – March 8, 2018

The DAX has started to move higher which is just a continuation of the bounce and the rebound from the lows of the range. The lows of the range were tested last week and once it held, we said that it was time for a rebound and that is what we are seeing at this point of time. We can expect the bounce to continue though it is more likely that the index would continue to trade between the 2 extremes of the range.

DAX Rebound Continues

The US stock indices have also been recovering over the last few day and this is reflected in the DAX as well. The index pushed through the 12200 region on the back of improvement in the global risk sentiment but the market is unlikely to push the index much further on with so much of uncertainty and risk continuing to abound in the markets as of this writing. The tariff plan from the US administration is about to be signed off by Trump and this is not good news for some part of the markets in Germany.

This, along with the tapering and the ending of the QE is likely to continue to weigh on the DAX for the short and medium term and that is why we are confident that there is unlikely to be any sort of a breakout in the near future. The lows of the range are also pretty much set for now. The only matter of interest for the market in the short term is likely to be the ECB rate announcement and the press conference that would follow soon after. During this time, it is expected that Draghi would touch upon the topic of QE.

It remain to be seen whether he is going to paint a hawkish outlook for the end of the QE and for future rate hikes or whether it is going to be a repeat of the same from the last press conference. If it is so, then it is likely that the DAX would continue to consolidate and range.