DAX Index Daily Fundamental Forecast – October 30, 2017

The DAX index has been clearly buoyed by the announcement from the ECB regarding the extension of the QE and after an initial burst, has now settled into a period of consolidation and ranging over the past couple of days. The index would now be looking at 13500 as its next target and the region of 13200 should now serve as good support for the short term.

DAX Ready to Take Off

The DAX has been buoyant ever since the ECB belied market expectations for quick end to the QE by extending the QE program to beyond September 2018 and this has now ensured that the markets will continue to see more funds from the ECB in the coming months. This was not the expectation that was set by the ECB a couple of months back when it announced its intention for tapering of the QE due to the improving data from the Eurozone in the period before that.

A combination of these announcements from the ECB and the incoming data had led the market to believe that the ECB would begin tapering in a large way this year itself and would complete the program pretty soon but none of these came to fruition. The economy of Germany has always been quite strong and has been the bulwark of the Eurozone economy and hence the economic fundamentals have always been good as far as the DAX was concerned. With the uncertainty over the QE now out of the way, the DAX has been freed from the only thing that was holding it back and now it is set to join the global stock market rally.

Looking ahead to the rest of the day, we have the retail sales and CPI data from Germany to be released later in the day and once that is out of the way, the traders can the get back to their business of pushing the index higher.