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DAX Index Daily Fundamental Forecast – March 20, 2018

The DAX index fell yesterday as there was a fall in the stock markets across Europe over the last 24 hours and this is purely a reflection of the same. There was a positive sentiment pouring out of the Eurozone and it is indeed ironical that the index is falling when there is positive news all around. This is how the situation is as far as the DAX is concerned and that is why we believe that the index is in a strong bullish grip.

DAX Under Pressure

Also, yesterday, there was a positive outlook generated for the Eurozone and this helped the euro higher. This is in line with the incoming data from the region which has been extremely good and this narrows down the choices that are available for the ECB. The ECB can no longer be in a denial mode and believe that the data needs to get any better and it is time that they start getting cracking on the tapering of the QE and its ultimate end.

DAX Hourly
DAX Hourly

This is the message that has been pouring in through the incoming data and that is what we saw over the last 24 hours. Though this is positive for the Euro, this is negative for the stock markets which have been falling due to this during this period. The DAX slipped below the 12200 region due to this fear and uncertainty and also due to reports from the US that they are preparing for launching many more tariffs on the import of Chinese goods. This is likely to lead to a global trade war which would likely affect the world trade order and hence not good for a lot of economies.

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Due to all the above factors, we believe that the index would continue to remain under pressure during the short and medium term. We do not have any major economic news or data to drive the DAX for today but the geopolitical issues are likely to dominate the market headlines in the short term.

This article was originally posted on FX Empire

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