DAX Index Forecast – DAX Falls Hard on Friday

The DAX index fell hard during the course of trading on Friday as global and domestic factors continue to have an impact on the index. This is something that we have been warning over the last couple of weeks that though the index might be moving higher, the fundamentals continue to remain weak and these are the fundamentals that brought about the fall in the index a few weeks back.

DAX Under Pressure

With them continuing to persist, it was only a matter of time before the DAX begins to fall once again and we saw that happening on Friday. The trigger for that appeared to be the continuing uncertainty over the Brexit process and more importantly, the payment that needs to be made to the UK. The Brexit process had appeared to be progressing in a smooth manner over the last few months but as we get closer to the date, we are seeing that there is a lot of uncertainty within the UK and this is affecting the rest of the Eurozone as each one now seems to have a different opinion on how it should progress.

This is beginning to have a direct impact on the Eurozone and Germany and the quantum of payment is also likely to be a matter of contention between the various parties and as this uncertainty continues and becomes more and more, we are likely to see the index continue to weaken as well. So far, the region around 12500 has managed to hold the prices for now but we believe that this could be only temporary. The US stock indices closed on Friday on a weak note and this could force the DAX on the backfoot.

Looking ahead to the rest of the day, the DAX is likely to begin on a slow and steady note and with the Asian stock markets also not showing any signs of bullish activity, it is likely that the DAX would be under pressure for most of the day as the traders and the investors look towards the developments in the UK and in the Brexit process.