DAX Index Daily Fundamental Forecast – June 26, 2017

The DAX is likely to continue with its consolidation and ranging over the short term as we do not see any fundamental or economic drivers to be strong enough to push it through the established range in the short term. This would mean that the traders are likely to be exposed to more ranging between the 12550 and 12950 mark in the short term and this would not be good news for long term investors who are looking towards some big range moves.

DAX Trading Getting Tiresome

The index has been within this range for several weeks now and though this is a dream come true for range traders, this kind of directionless and choppy trading does not augur well for the markets in general. The fundamental factors in the German economy continue to be strong and the Eurozone in general has also been having some strong economic data of late but none of these seem to have too much of an effect on the DAX.

We would have expected the DAX to be much higher by now, in line with the surging US stock indexes and it is indeed a surprise that it has not been able to do so. The German elections are still quite far off and so to think that it could be a reason for this prolonged consolidation does not make too much sense at this point. The only logical explanation could be that the investors are not ready to buy at such high levels and the global factors do not favor much selling as well. This could be a reason for the deadlock and the consolidation.

Looking ahead to the rest of the day, we do not have any other major news from Germany for the rest of the day and so, expect a moderately strong opening for the DAX index but this should be limited by the selling in the 12900 region.