DAX Index Daily Fundamental Forecast – September 21, 2017

The DAX index finally found some life in its final hours of trading as the FOMC and the Fed seems to have galvanised the DAX bulls into action and they then did the needful by pushing the index through the 12600 region and this kind of bullishness is likely to continue when the market opens for today but it remains to be seen whether the bullishness will hold as we head into the weekend.

DAX Index Moves Higher

The FOMC did not hike rates yesterday but left the door open clearly for a rate hike in December. The market was a bit uncertain on whether they would be taking such a hawkish stance, on the back of choppy incoming data over the past couple of months but the Fed decided to trust the data and trust the early signs of recovery that we are seeing in the data over the last couple of weeks. That is why the dot plot came in more hawkish than expected and this helped the dollar a great deal.

This also helped to improve the mood in the stock markets and this caught in the DAX as well as it ripped through the 12600 region and closed the day above it.  The index is likely to open in a strong manner today as well as the bullishness is likely to continue when the market opens. On the other hand, we have a speech from Draghi later in the day today and any hint of tapering of QE would be bad for the index and so the traders need to keep an eye on that.

Also, we have the German elections over the weekend and though it is clear that Merkel would win this time, in all probability, the traders might still have that lingering feeling of things not going according to plan and may want to take profit ahead of the weekend. Apart from the speech from Draghi, we do not have any economic news for the day and we expect some profit taking later in the day.