DAX Index Forecast – DAX Bounces Off the Lows

The DAX index managed to pick itself from the floor once again yesterday which marked the 3rd day in the week where the index has been trying to pick itself from the lows. The risks around the world, the threat of a trade war and its effect on the German economy and also the ECB posturing over the QE and its continuation, all seem to be having a bearish effect on the DAX.

DAX Likely to be Buoyant Today

This has kept the index under huge pressure and these are the reasons for the index to fall from above the 13000 region, which it visited for a brief while about a week back, to the 12200 region where it trades now as of this writing. The global stock markets have been jittery over the continuing trade war between China and the US and with more and more countries likely to come under the scanner and likely to adopt a combative stance to each other as far as trade is concerned, it is the corporates that are likely to suffer in the long term.

Of course, some companies might survive better than the others but in the broad sense, this kind of trade war is unlikely to benefit anyone. The economies of the various countries are likely to be affected in the long term and already, some of the data do show signs of it. With the Eurozone also undergoing a tough time already, with the incoming data continuing to be weak over the last few weeks, the trade war is only going to add further burden to the euro and also the stock markets in the Eurozone.

Looking ahead to the rest of the day, the US stock indices closed on a stronger note yesterday and the Asian markets have also followed suit and hence we can safely expect a strong opening to the DAX today. This should push the index towards 12300 and beyond in due course of time but only time will tell whether this is a correction of the downtrend or a reversal.