DAX Index Daily Fundamental Forecast – August 16, 2017

The DAX index consolidated for most of the day yesterday which was in line with the action in most of the stock markets in Europe yesterday. With the lack of any fundamental drivers, we are increasingly seeing the DAX look towards the other markets in Europe and in other parts of the world for direction and that is why we have been seeing some choppy action in the DAX over the last few days or so. We have seen the index consolidate, we have seen it move lower, then move higher and then consolidate again, all based on the actions of the other stock markets.

DAX Consolidates

The only fundamental driver in recent times has been the news of tapering from the ECB but after some talk around it about a month ago, it has now been put on the backburner and it is likely to come back only after the end of the summer. Till that time, the talk of tapering is likely to be limited and this is one of the reasons why the DAX has been directionless for now.

But this could soon disappear and we could be seeing some volatile trading pretty soon as we approach the German elections which are to be held in September. Though the party of Merkel holds a large lead, things could change within a matter of weeks and the happenings around the world over the last year or so have been evidence of that. So, as we approach the elections, we are likely to see the volatility pick up and the DAX index might come under pressure during that time as the investors and traders pull out their funds as a matter of safety before the elections.

Looking ahead to the rest of the day, we do not have any major news from Germany but with the markets around the world mixed and choppy, we expect some similar kind of consolidation and rangy action in the DAX index for today with 12350 acting as the ceiling for now.