DAX Index Still Trading Under Pressure

The DAX index continues to consolidate as the bulls find it difficult to generate enough momentum to push the prices higher in the short term. There is also a lot of uncertainty and fear in the market and as the index has broken through some of the important supports, we are seeing that there is even more likelihood that the investors would think twice before investing at this point.

DAX Under 12800

The region below the 12800 price region is where the bears are in control and under such circumstances, this is also something that the traders understand as well and that is why we are seeing a kind of deadlock as the traders and the investors do not want to push too much in any specific direction. The political situation is many parts of the Eurozone continue to remain jittery and that is only adding to the climate of uncertainty in this index.

The factors with Germany continue to remain strong politically and economically as well and the economic data from Germany continues to show signs of stability but rarely has the DAX, in recent times, been driven by the internal factors. The index seems to be driven more by the way the global indices and the European indices have been moving and they have been showing signs of fatigue of late and that is what makes the position of the DAX doubly dangerous over the short and medium term as well.

Looking ahead to the rest of the day, we do not have any major economic data from Germany but we have a speech from Draghi later and this should have a small impact on the DAX but without that, we believe that the consolidation and the ranging should continue below the 12800 region for now. The traders will have to wait for this choppiness to over and a direction to be established before entering the index again.