After a Weekly Jump Of 2.9%, Will the DAX Rally Continue?

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Asian markets are trading in flat to negative territory in early trading. DAX, which has been in a strong uptrend is expected to continue the rally on upside with resistance pegged at 9,865.65 and 10,022.08 on upside while support lies near 9,369.86 and 9,149.80. The DAX jumped last week 2.9 percent for its best week since March.

The European Central Bank President Mario Draghi set the cat among the pigeons last week, when he pushed for the introduction of three key interest rate benchmarks for the Euro zone. This coupled with the Central bank’s decision to introduce the Quantitative Easing program, which is a form of stimulus package for the European economies caught the market players by surprise and sent the Euro plummeting against the U.S Dollar.

The European Central Bank announced that it would be reducing the benchmark rates in the range of 10 basis points and also introduced the asset backed security repurchase program in order to inject more funds into the market. It has also come forward to buyout MFI issued bonds as part of the Quantitative Easing program. The entire package is all set to be commenced from October of this year. The central bank is scheduled to share the finer details of the stimulus programme at its next meeting on 2nd October.

The move by the central bank to introduce the Quantitative Easing program came as a surprise to many of the investors as indicated by the sudden dip in the valuation of Euro against other major currencies. President Mario Draghi pointed out that the prevailing trailing economic conditions across much of the Eurozone economies is likely to persist for an extended period. Coupled with the current slowness in economy as represented by the dip in inflation to 0.3 percent in August as against the 0.4 percent in July, the outlook for the region too is subdued with respect to inflation and the further slowdown in the growth rates of the major economies which constitute the Eurozone.

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Deepak Tiwari, a law graduate, has been working as a journalist for six years now. He currently writes on Bitcoin, economic, and Forex related news at ForexMinute, the brand new financial news portal which is making waves among Forex traders around the globe for the innumerable Forex resources it offers for readers, traders and brokers. His other specialties include writing on law & governance, finance, internet marketing, careers, politics, international relations & diplomacy, etc.