DAX Index Daily Price Forecast – DAX to Trade Rangebound with Positive Bias

European market yesterday saw most of the major indices and equity stocks closed in red as Brexit uncertainties, mixed macro data outcome in Euro area and dovish meeting minutes added bearish pressure in major markets. While investor sentiment took a dovish turn, cues from international market and ECB member Peter Praet’s comments post-release of meeting minutes hinted that policy committee members are going to maintain patience awaiting further data to gauge the impact of economic slowdown in Euro area economic activity as market conditions are highly uncertain at the moment owing to various geopolitical issues. His speech combined with ECB meeting minutes was interpreted in such a way that While ECB may prepare for their TLTRO plans the execution of same may be delayed till the end of March 2019. This helped the European market recover some losses and few major markets managed to close with mixed activity.

ECB Meeting Minutes Inspired Divided Investor Sentiment

German stock market was one such major market that managed to see a mixed closing at the end of the day. Out of total 778 stocks trading in the exchange, 377 stocks closed in green while 88 closed unchanged at end of trading session. As per data on the performance of sectoral indices from Frankfurt stock exchange, 10 of 18 sectoral indices closed negative for the day. Stocks from Food & Beverage, consumer & cyclic and insurance sectors saw most gains while stocks from retail, technology and construction sector saw a high loss. While investor sentiment in the European market continued to see the dovish influence, DAX index had managed to hit new monthly highs for the second consecutive session yesterday on positive cues from the international market. The three major German indices yesterday saw a mixed performance and at end of the day DAX, MDAX & TECDAX closed with 0.19%, -0.41%, -0.43% change in value. US Wall Street last night saw all its major indices close in red as macro data outcome hinted at lower home sales and manufacturing activities.

While Sino-U.S. trade talk optimism following Chinese vice premier Liu He’s visit to Washington for high-level trade talks with President Donald Trump boosted forex markets, it failed to have any impact on Wall Street equities. Asian equities saw divided outcome today as cues from Wall Street pressured most major equities into dovish price action while optimism surrounding trade talks helped Chinese equities trade and close on a positive note. DAX futures traded in the international market with positive bias up by nearly 0.20% ahead of European market opening. This combined with the fact that ECB’s TLTRO is likely to be delayed and optimism surrounding Sino-U.S. trade talks are expected to provide positive fundamental support to DAX during today’s market hours. While DAX may open positive on cues from international markets, dovish investor sentiment and caution on Brexit uncertainties are likely to limit upside move of DAX resulting in range bound action with a bullish bias.

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This article was originally posted on FX Empire

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