DAX Index Forecast – Index Buoyant as it Finds Support

As expected, the DAX index began the day on a weak note and continued through the day to trade in a weak manner. But the important point to note towards the close of the day was the fact that there seemed to be a lot of buying in the 12300 area which meant that there is some strong support here and this should give some confidence for the index bulls in the upcoming day.

Strong Support Near 12300

We had mentioned in our forecast yesterday that the opening of the DAX was likely to be weak due to the fact that the US stock indices had closed lower on the previous day. We saw something similar happen as the index continued to weaken through the course of the day. The fact that it was a holiday in the U yesterday could have allowed the index to express itself and that is one of the reasons why we saw some strong support come in at the 12300 region yesterday. We would not be surprised if this region continues to act as support and lead to a rebound in the index today as the closure of the US markets would help the DAX.

There are some important pieces of news from the US later in the day today but it is likely that the DAX would not be much impacted by that at that point of time. The lack of fundamental drivers and economic data has been telling as far as the DAX is concerned and we have to wait and see how the rebound from the support region is going to work out and whether it is going to lead to a reversal in the short term, something that the bulls would be hoping for.

Looking ahead to the rest of the day, we expect the DAX to be buoyant for the day with the volatility increasing later on in the day as the US stock markets open after the holiday and we get the FOMC meeting minutes later on in the day.