DAX Index Forecast – Index Consolidates But Downtrend Persists

The DAX index has been trading within a tight range and it continues to do so this week as well. The start of the week did not have any major volatility associated with it as the index continued to rattle on. This was quite understandable considering the fact that the global stock markets have been in a stalemate over the last few days.

DAX Likely to Move Lower

There have not been any significant developments around the world over the last few days which in itself is a huge relief for the traders and the investors. This has rubbed off on the DAX over the last few days and that is why we are seeing the index within range. The index had been having a tough time about a week back as the fears of the trade war escalating and causing a lot of loss to a lot of economies seemed real. But the market seems to have forgotten this for now and the markets continue to trade in a calm manner as of this week.

The effects and the impact of the trade war is likely to be known only in the medium term as the tariffs and its problems begin to percolate into the economies of various countries and they would then begin to feel the pinch and begin to find the need to retaliate in a stronger manner. This is going to take a bit of time but till that time, the US companies and the stock indices are enjoying their time in the sun. This is also one of the reasons why the DAX has been able to recover so far but we continue to believe that the underlying trend is down and this is going to show up in the markets time and again whenever the indices move up.

Looking ahead to the rest of the day, we do not have any major news of fundamental data from Germany or the Eurozone. Technically, we believe that the DAX has completed its correction of the downtrend and hence it should start moving back lower in due course of time.