DAX Index Under Pressure

As expected, the DAX index started on the backfoot as the index fell below the 12000 region at the open and it spent the rest of the day trading in a very weak manner. It has to be noted that much of the day was spent in consolidation and though the index did try to recover once in a while, it could not manage to do so.

DAX Support Under Pressure

The fall in the index was mainly due to the risk sentiment getting a huge hit on the back of worries over the global trade war intensifying. There were also worries in the tech sector over the tweets of Trump attacking Amazon and this had also placed a lot of pressure on the stock indices around the world. But that seems to have relaxed a bit but the fear of a global trade war has reared its head once again, as the US imposes more tariffs on the Chinese goods and the Chinese are expected to hit back.

So, with these issues dominating the headlines around the markets, we believe that it will only be a matter of time before things begin to blow up. And with the DAX already flirting with the lows of its range, it is going to be a touch job for the bulls to hold the line when the stuff hits the fan. The support is going to come under renewed pressure at any point of time and this is only going to make things even more difficult for the bulls.

Looking ahead to the rest of the day, the focus of the markets would continue to be on the geopolitical and trade events and this is likely to place the markets under pressure. It would not be a surprise if the support comes under pressure and even if its gives way and if and when it does, we have to be looking much lower.