DAX Index Daily Fundamental Forecast – January 11, 2018

The DAX index corrected lower during the course of the last 24 hours and this was not much of a surprise considering the bull run that it has been having over the past week or so. Hence a correction in this bull run was only to be expected and this move lower over the last 24 hours was part of the same. The index moved below the 13300 region and ended the day above the 13200 region.

DAX Moves Lower

The correction in the index was also part of a global development as the major stock markets around the world, including the indices in the US, underwent a correction and closed slightly lower. Since this was not due to any major fundamental factor, we should consider the bull run in the DAX to be intact at this point of time though, as explained in some of our forecasts, it could reverse anytime depending on how the coalition talks pan out in the short term.

This is the final attempt from Merkel to string together a government and if it fails, then it could open up the possibility of another election. Such an election is likely to bring in even more uncertainty as it could lead to an even more fractured verdict placing Merkel in a lot of danger of losing her position. This is likely to be the last resort that she would be turning to and if that happens, the uncertainty could translate into a large bearish run in the DAX.

Looking ahead to the rest of the day, we do not have any major data from Germany or the Eurozone and with the lack of fundamental drivers, we can safely expect the index to continue on its merry ways of consolidation and ranging for the day with a bearish bias. The lower close in the US stock indices could lead to a slow opening for the DAX.