DAX Index Daily Fundamental Forecast – October 20, 2017

The DAX index moved lower during the course of the day yesterday, negating the breakout from the day before and exposing it to more risk of a correction as the index continues its struggle to break through the 13000 region. This is likely to keep the index under pressure during the course of trading today as well though the market opening is expected to be steady.

DAX Turns Choppy

The DAX opened on the backfoot yesterday and this weakness continued through the first half of the day as the weak Chinese GDP weighed on the markets. This data had brought in a correction in many of the Asian markets and it weighed on the DAX also, when it opened, and this pushed the index back through the 13000 region and towards the 12900 region during the course of trading yesterday.

The US session also opened on the backfoot due to weak global cues and also due to the fact that many investors and traders were worried about the Black Monday anniversary yesterday. This event, which happened 30 years ago, should have had little impact on trading yesterday but for the fact that the media built up this event and induced a sense of fear among traders which led to some profit taking. But as the investors began to notice that their fears were not true, they set about buying stocks in the second half of the day which helped the DAX to recover during that period and close just below the 13000 region for yet another day.

Looking ahead to the rest of the day, we do not have any major news from Germany or the Eurozone for the day and so expect a steady opening for the index today. We should expect some consolidation and ranging for most of the day today as the focus shifts to the dollar and the US on the back of passage of the tax reform bill in the US late yesterday night.