DAX Index Forecast – DAX Continues to be Buoyant

The DAX has been trading in a pretty strong manner since the beginning of the week though it is just a matter of time before the next round of correction begins to set into the markets. None of the factors and the fundamentals that brought about a correction in the DAX index last week has gone away and hence it is not right to expect the index to continue to remain in the buoyant in the short and medium term.

Index Above 12500

In fact, the trade war has only been spreading across more and more countries during this period and it is only a matter of time before the economies of various countries begin to feel the pinch and we should be seeing that in the incoming data over the next couple of months or so. The only factor that could be supporting the DAX is the confusion and the uncertainty in the UK over the Brexit process. It is ironical that what is uncertainty in one place could lead to some sort of rejoice in another place but that is likely what we are seeing now.

The UK PM May has been struggling to keep the flock together and keep the promises made around the Brexit process but things seem to be getting more and more worrisome for her. If her position is challenged and if she begins to lose ground, then the Brexit process could be in jeopardy and this could benefit the Eurozone and Germany as this would only delay and dilute the entire process. The new incoming PM could be more malleable for the Eurozone leaders and this is probably one of the reasons for the move higher in the DAX which has since moved through the 12500 region and trades above that comfortably.

Looking ahead to the rest of the day, we believe that the market would consolidate and probably correct a little bit as it needs to take some rest after the rise that we have seen over the last few days. So, the traders have to be careful for sometime and allow for the dust to settle.