DAX Daily Fundamental Forecast – February 13, 2017

The DAX continues to range and consolidate but the inability to break through on the topside over the last few weeks should continue to worry the bulls. Towards the end of last year, we saw the DAX in a raging uptrend which pointed to more of the same during the new year as well. But ever since the beginning of the year, we have been seeing that the index has failed to climb to 12000 which was considered as a very easy short term target as it was in such a strong uptrend.

What makes this even more curious is the fact that during the same time period, we have had the US stock indexes move on to record highs even though they were under the direct impact of Trump and his policies. On the other hand, we have had a fairly quite time in Europe and in Germany, we have been seeing some good economic data and fairly stable political scene and hence it is indeed a big surprise that the DAX has not been able to continue to its uptrend. We have the German elections in September where Merkel is likely to face a serious challenge and this could probably start to weigh on the DAX within the next few weeks. With all this in mind, we would advise the traders to stay on the sidelines and wait for a breakout on either side of the range before they begin to take any trades on the DAX. For day traders, it would be an ideal situation as they would get to trade the range with a stop loss just beyond that.

Looking ahead to today, we do not have any major economic news from Germany to start the week and so we can safely expect some more consolidation and ranging in the DAX and we can wait for the breakout patiently.