DAX Index Spurts Higher

The DAX index has been shooting higher as the risk sentiment continues to get better all around the world. The index has got a boost due to the economic data from the Eurozone and the strength of the dollar has pushed the euro on the backfoot. A combination of these has helped the DAX higher.

DAX Pushes Higher

It is indeed a great irony that the index seems to be rising when the economic data from the Eurozone is getting worse. After reaching the peaks towards the end of last year, we are seeing the economic data from the Eurozone getting progressively worser. This should be a matter of huge concern for the ECB which has been looking to taper the QE and end it once and for all. This is unlikely to happen anytime soon if the incoming data does not support this move.

That is the reason why we have been having the strange situation where the DAX strengthens when the data is bad, as the investors and traders are highly encouraged by the fact that QE would continue longer and this would mean that the buy side is well supported. That is one of the reasons why the DAX has been moving higher despite the fact that the US has done ahead with increasing the tariffs that they have imposed on the Chinese goods and the combination of the above reasons is likely to keep the index buoyant in the short term.

We saw the DAX rising through the 12200 region as of this writing and this buoyancy is expected to continue atleast till the US session when the employment data is expected to be released from there. This should then provide us with the trend for the short term and keep the traders on their toes due to the volatility that is likely to lie ahead.