The DAX index continued to trade in a weak manner during the course of the day on Friday as the index toppled towards 12100 during the day but then barely managed to hold and recover a bit towards the end of the day. As we have been mentioning in many of our forecasts, this weakness in the index is similar to what we are seeing in the rest of the European stock markets where the buyers have been jittery and uncertain about what the future holds for the markets.
DAX Might Recover a Bit
There has been a lot of talk over the past several months on whether the global stock markets are too high for their own good and hence the buyers in the markets seem to bail out immediately on the first hint of trouble. They have been getting enough hints over the last couple of weeks with all the talk of tapering from the ECB which is likely to hit the funds being pumped into the market.
This has thrown the bulls into a bit of confusion on whether they would want to sustain the high values in the DAX index or whether they would need to take profits and take away what they have right now. This has led to some choppy action in the DAX and the other European stock markets but the direction has clearly been done as the markets struggle with the pressure on them.
Looking ahead to the rest of the day, we saw a bit of recovery in the DAX during the day, which was more to do with something technical rather than any fundamental event. We expect the recovery to continue during the day as well but with 12300 capping. So expect some consolidation and ranging during the course of the day and over the next few days as well, between the 12100 and 12300 regions as the traders and investors decide on the next course of action.
This article was originally posted on FX Empire