DAX Index Daily Fundamental Forecast – December 18, 2017

The DAX index continues to trade within a tight range and consolidates as we head towards the fag end of the year. We do not expect any major action in the DAX market over the next couple of weeks as the traders and investors go off on a well deserved holiday and the politicians also wind down their rhetoric for the year, which should help to quieten the markets down.

DAX Looking Buoyed

The DAX has been chopping around for weeks now, with no specific direction as the global stock markets also continue to move around with lack of fundamentals. The US stock indices received a boost on Friday as the tax reform bill is very close to getting passed and that should happen anytime this week. But the impact of that on the DAX and the other European markets is likely to be minimal, if any. The DAX awaits further developments in the Brexit process as the only source of volatility in the markets going forward.

Over the weekend, we had the UK PM May looking very determined to push through some solid deals in the Brexit process and this should help the DAX move higher when it opens. We doubt whether this would be enough for the index to break through some of the key resistances but what the tax reform bill passage and the Brexit deal developments should do, is to keep the market well buoyed over the short term as the market comes to terms with the developments.

Looking ahead to the rest of the day, we do not have any major economic news from the Eurozone or Germany and so expect a strong beginning to the markets which should settle down as the time goes on. We expect the DAX to continue to consolidate in the short term.