DAX Daily Fundamental Forecast – January 12, 2017

In line with the major stock markets around the world, the DAX index finally made a break yesterday and managed to finish in a bullish manner. We had been mentioning in our forecasts that it was important for the DAX bulls to bring in the break soon as the ranging and consolidation had been going on for too long  and this was likely to seriously test the bulls, the longer that it went on. Yesterday, the stock markets around the world shrugged off a majority of the comments from Trump and chose to focus on the positives that are likely to arise once he assumes his Presidency and hence the major bourses ended the day higher.

That is likely to affect the opening of the DAX today as well and we are likely to see a bullish opening for the DAX today. The German economy continues to be strong and with that taken care of, it is the global risks that seem to have more say in how the index is doing than any of the internal factors. With Germany being the most important country in the Euro, it is important that Germany remains strong for the euro and vice versa and any changes in these is likely to affect the index adversely. So far, there has been no such sign and hence the index has been going from strength to strength.

Looking ahead to today, we do not have any major economic news from the Eurozone and so the after-effects of yesterday are likely to have a large say in the DAX today and hence we expect a bullish opening. We believe that the bullish leg is likely to be sustained during the course of the day and the index should target 12000 in the short term. Traders need to be careful in their trading today.