The DAX index had a choppy ride during the course of the last week as the index rose, fell and rose again to complete the week. What should give the bulls some heart is the fact that the index finished close to the highs of its range and that sets it up for a good week ahead. But unless the range breaks through, not much gain can be expected.

DAX Finishes at Range Highs

The DAX rose in anticipation of the ECB announcement and press conference and then corrected lower during the middle of the week just ahead of the meeting on the back of some profit taking as many of the investors viewed this press conference from Draghi as being very important. There have been some choppy incoming data from the Eurozone over the past few weeks and this was expected to make Draghi temper down his plans for the tapering and ending of the QE. This was confirmed as such when Draghi, though sounding confident of the economy, did say that the ECB was watching the situation closely and was worried on certain aspects.

This was enough trigger for the investors to believe that the QE would be running for longer than what was initially expected and this led to the belief that the funds for the buy side would continue to be available in abundance. This helped the DAX index to pick up strength once again and push higher through the 12500 region and close the week in a strong manner. We will have to wait and see whether the index would be able to carry forward the momentum in the coming week.

Looking ahead to the new week, we will see the end of the month and the beginning of a new month which would mean that we are likely to see a lot of month end flows. We are also going to see a lot of data from the US which could impact the global markets. There are no major economic data from Germany or Eurozone for now but we expect the index to be driven by global factors which are likely to be impacted by the data from the US and the UK in the coming week. The bulls are not yet fully in control and they would eye a break of the range highs for them to make further progress.

This article was originally posted on FX Empire

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