DAX Daily Fundamental Forecast – January 18, 2017

The DAX continued to consolidate and range for the day yesterday as well as the market digested all the news from the different parts of the world. This is likely to continue for the next few days atleast as the market waits to see how the risks and the fears pan out. One of the major risks in the market is the fact that Trump is assuming Presidency in the US and no one is yet sure of what to expect from his administration. He has not yet made any kind of clear statement with regard to fiscal and economic policy and this has caused confusion and fear in the markets. So the traders and investors are in a wait and watch mode before they invest further.

The other matter of serious concern for the Eurozone is the Brexit process. We had the speech from the UK PM May yesterday where she spelt out clearly that it is going to be a full Brexit and that there would be no half measures. But at the same time, there is likely to be tough negotiations regarding the trade zone between the UK and the Euro region and the UK is likely to seek the best deal in this. This deal is very important for the euro region as Germany and other countries do a lot of business with the UK and they would like the terms of the deal to continue to be favorable to them. So, with things being unclear, the investors continue to wait before they are ready to invest again in the different markets and that is another reason for the consolidation in the markets in recent times.

Looking ahead to today, we do not have any major economic news from any part of the eurozone but the volatility in the markets has certainly picked up in the recent weeks and it is important for the trades to trade carefully and make sure that they have their stop losses in place.