DAX Index Daily Fundamental Forecast – January 4, 2018

The DAX had a strong bullish day yesterday as the bulls looked to reestablish control over the index after the long period of holidays. In fact, the European stock markets as a whole were quite buoyed during the course of trading yesterday and this rubbed off on the DAX as well and helped it to close higher for the day.

DAX Moves Higher

It has to be noted that the fundamentals have not changed over the last 3 weeks but then we have seen the index move to the range highs and then move through the range lows to set new lows as the political uncertainty in Germany continues to dog the markets. That has not changed since the beginning of the week but the improvement in the risk sentiment has helped the bulls to turn it around so far and move the index through the 13000 region once again.

We had mentioned in our forecast yesterday that the bulls would be looking forward to pushing the index higher and back into range so that they could force a period of consolidation and it appears that they have managed to do exactly that. The index has also been helped higher by the increase in the commodity prices with the gold and silver prices moving higher over the last few days and also by some strong economic data from Germany with better unemployment change data. With the market returning to full liquidity, it remains to be seen whether this move higher would stick or whether the range lows would be broken yet again.

Looking ahead to the rest of the day, we have the services PMI data from Germany but that is not expected to have too much of an impact on the markets. The battle between the bulls and bears, for control, is likely to be resumed during today but with the US stock markets moving higher yesterday, we expect a steady opening for the DAX.