Yahoo Finance DAX Index Forecast – DAX Likely to Start Weaker
The DAX index has managed to cross through the 13000 region on the back of the ECB saying that the rate hikes would be delayed till the summer of 2019. This put paid to the hopes of many traders who were expecting the rates to be hiked at a much quicker pace and the QE to be ended quite soon as well. With both of these possibilities being ruled out, we are now seeing the DAX bulls in charge.
Bulls in Control
Till such an announcement came about, the DAX was turning out to be choppy and the traders and the bulls were finding it difficult to push the index through the 13000 region as the worries about the tapering and the end of QE seemed to dominate the market and the investors did not want to take risk at this point of time. Their worries were also not too off the mark as the incoming data from the Eurozone seemed to support their view and made it difficult for the ECB to arrive at a decision.
This probably weighed on the minds of the ECB members who then decided, taking into consideration the political uncertainty in Italy and other parts of the Eurozone, to continue the QE for now to ensure that they do not rock the markets and also to ensure that the Eurozone economy is well supported for now amid all the turmoil. This is the strategy that they are likely to adopt for the short term.
Looking ahead to the rest of the day, the US stock indices closed lower for the day and hence the same is likely to affect the DAX index also. Considering this, we could see a weak opening for the index which could also serve as a correction for the DAX of the current uptrend, which is likely to last for the short term. Traders would be well advised to pick up the index at regions of support.
This article was originally posted on FX Empire
