DAX Index Daily Fundamental Forecast – September 5, 2017
As we had mentioned yesterday in our forecast, the DAX index opened the day yesterday in a weak manner on the back of an increase in global risk but it managed to recover during the course of the day and basically closed the opening gap and finished the day almost in the same region where it started.
DAX Index Likely to Continue Consolidation
The index opened with a bearish gap for the day yesterday as the tension in the Korean region gripped the Asian markets and led the stock markets lower in many parts of the world. The DAX also followed the same template and opened lower near the 12000 region but we had been mentioning that this region was likely to serve as a strong support region and once again, we saw the index bounce off that region and as the day progressed, the DAX recovered and managed to close the day well above the 12100 region.
As we have been saying over the past few days, we believe that the index is now in a consolidation mode ahead of the German elections and with the tapering delayed by the ECB, the consolidation and ranging is likely to happen with a bullish bias in the short term. As far as the German elections are concerned, Merkel continues to hold a healthy lead over her rival but we expect a relief rally only after the elections are over and the results are officially announced.
Looking ahead to the rest of the day, we expect the consolidation to continue in the DAX index for today and also in the short term with the regions around 12000 and 12350 serving as support and resistance respectively. But with all the global risks and uncertainties, things may not be so straigtforward going forward and that is why it is important to choose the right regions to trade and always trade with a tight stop loss.
This article was originally posted on FX Empire