DAX Index Forecast – DAX Manages to Bounce HigherThe DAX has managed to rebound but the bounce, when the bearish factors continue to exist in the background, needs to be taken with a pinch of salt
The DAX index managed to recover from its lows below the 12500 region over the last 24 hours and closed higher for the day. The index is likely to continue to be buoyant for the day today as the stock indices in many of the major global markets have been trading strongly since the beginning of the day today.
DAX Pushes Higher
There has not been much fundamental data or economic news from the Eurozone or Germany over the last 24 hours and what this has meant is that the index has been driven by the global market factors than anything fundamental that is happening within Germany. The risk on factor seen in the global markets has helped to boost the index and it now has managed to push higher though we continue to view the rebound with suspicion. We had done the same on the earlier rise as well and we believe that this time as well, this is more of a rebound and a correction of the downtrend.
The Eurozone continues to reel under the impact of a variety of bearish factors that includes the ECB and the QE tapering which is still uncertain as the ECB has yet to take a call on when that would happen, the Brexit process also has to deal with its own set of uncertainties as the UK battles domestic issues and also continues its negotiations with the Eurozone and the Eurozone has also had to grapple with the trade war and its effects as well. All this are likely to ensure that even the moves higher are met with a lot of selling and this is likely to keep the traders busy for now.
These are all major reasons which continue to exist and impact the markets over the last couple of weeks and none of the factors have gone away and neither can they be wished away as well. It is important that the investors and the traders do understand this and do not get carried away and they need to approach all these bounces carefully and with a pinch of salt.