DAX Index Fundamental Analysis – week of April 2, 2018

The DAX index had a good week during the period gone by as the index managed to recover from the huge fall that it had suffered during the week before. In that week, we had seen the index fall through some major support regions and on to the lows of the range as the global risk had risen several notches due to the decision of the US to impose tariffs.

DAX Recovers

But just when it looked as though all was lost for the DAX bulls and that the index would slide lower through the lows of the range and all mayhem would break loose, we saw the slide being arrested since the beginning of the week. The index and the stock markets in general around the world began to recover and rebound in a slow and steady manner. There was no follow up action from the US or China for much of the threats that they had made in the previous week and this helped to remove the pressure on the markets.

This recovery began slowly as the week began and then it began to gather pace in a steady manner and the index closed the week comfortably above the 12000 region. But the global risks continue to reside just beneath the surface and they are likely to rear their head at anytime and that is why it is important that the traders do not get carried away. Also, the index continues to trade within the larger range and there is no sign of a breakout as yet.

Looking ahead to the coming week, it is going to be the first week of the month but a shortened week as well and so we are likely to see the index continuing in its range for the short term. We have some important news like the employment data from the US but that is unlikely to have a direct impact on the DAX and even if it does, we dont think that would be enough to push the DAX through a breakout. We believe that the traders should keep an eye out for any geopolitical developments as these are likely to have much more of an impact on the index than anything else.