The stock markets around the world were in a recovery mode for the past 24 hours and this had an effect on the DAX index which also managed to recover to a great deal yesterday as the index shot through 12200 and managed to stay above the same to close the day. We expect the recovery to continue in a subdued form in the short term as the market waits in anticipation of what would be the outcome from the meeting at Jackson Hole.
DAX Buoyant on Improved Outlook
The DAX index has been consolidating and ranging, and we have been pointing this out in many of our forecasts over the last few days, and has been following the global trends over the last few weeks and the domestic news and data has had little impact on the index. That trend seems to be continuing in the short term as well as the global markets had a recovery based on improved risk sentiment and this has helped to push the index higher.
The index broke through the 12200 region but as we have said, the overall range of the index seems to be between the 12000 and 12350 region and we expect this range to hold for the short and medium term as well. Though there might be a lot of volatility in this range, we do not expect the range to be broken anytime soon, especially with the elections in Germany around the corner.
Looking ahead to the rest of the day, we do not have any major news from the Eurozone or the US for the rest of the day and so we can expect the positive risk sentiment to maintain the bullish tone in the DAX index for today and we could probably see the 12350 resistance region coming under threat shortly. The bias is still clearly on the downside and hence traders should be careful not to get carried away with the upmove.
This article was originally posted on FX Empire