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DAX Index Forecast – DAX Consolidates Near Lows

The index has been spending time near the lows
Colin First
DAX Thursday
DAX Thursday

The DAX is back to the lows of its range over the last couple of days after a brief bullish trip above the 13000 region over the last week or so. That move had inspired hopes that the bulls would be in control of the index going forward and help to push it higher in due course of time but that was not to be.

DAX Still Under Pressure

The main reason for the index to fall has been the panic and uncertainty that has gripped the markets all around the world due to the threat of a trader war breaking out between China and the US and the Eurozone is also expected to join the trade war if and when that happens. There have been threats and couner threats and there has been some follow up action as well and this had led to the belief that tough measures are on the way and the market knows that it would not be good for anyone.

DAX hourly

To the outsider, the threat of a trade war does not make sense as it is unlikely to have a good outcome for any of the major economies but we live in such times when logic does not hold much water. So it would not be a surprise if the trade war escalates and the index has been correcting lower mainly due to that reason though the data from the Eurozone has not set the markets on fire as yet as well. The DAX is back towards the 12600 region over the last couple of days and it continues to consolidate in the lows of the range waiting for the next direction.

Looking ahead to the rest of the day, we do not have any major news or data from the Eurozone or Germany and so we can safely expect the consolidation and ranging to continue for the day. We have the German BUBA president speaking but we doubt whether we would hear anything from him that is likely o impact the DAX index just yet.

 

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