DAX Index Daily Fundamental Forecast – December 21, 2017

The DAX index fell lower during the course of trading as the risk sentiment took a hit following the passage of the tax bill in the US. The passage of the bill was expected to spur the risk sentiment but what we saw was the complete opposite as the global markets fell and the DAX was no exception.

DAX Moves Lower

After threatening to break through the 13300 region for good and move further ahead, during the beginning of the week, we have seen the index correct lower ever since the time it became clear that the tax bill was going to be passed. Since them, we have had the index moving lower and yesterday, it moved even lower during the course of trading and closed the day just above the 13000 region. The PPI data from Germany came in a bit weak but we doubt whether the move lower was due to that.

We have been saying for sometime now that the DAX is caught in a tight range and that it would not be logical for us to expect the DAX to break through the range at a time when the market is winding down for the end of the year and the holidays. So, even when the index went through the 13300 region, we had advised caution at that time and on cue, we have been seeing the index moving lower since then and it is now back within the range.

Looking ahead to the rest of the day, we do not have any major economic news from the Eurozone or Germany for the rest of the day. Expect a steady opening to the index and this is likely to turn into some steady and consolidative trading for the rest of the day. The DAX index can be expected to be within range till the end of the year as the volatility dies down.