DAX Index Daily Fundamental Forecast – May 23, 2017

The DAX index continued to trade in a steady and lazy manner with no intention of gaining traction in any specific direction during the course of the day yesterday. This has been the situation ever since we saw a large correction in the middle of last week. So, this can only be interpreted as a consolidation for the next bigger move which is likely to come in when it receives some fundamental push from some news or event. With a large and strong buying support just below in the 12550 region, we would expect atleast one bullish leg higher in the index in the short term.

DAX In Consolidation

The index continues to trade within a tight range in the 12625 region as the investors are a bit wary of investing at the highs of the stock markets when there are a lot of fears and uncertainties globally. Even yesterday, we saw the UK being rocked by a terrorist bomb attack in Manchester and this is likely to keep the stock markets in Europe under pressure for today.

Like this, we have other risk events around the world including the Brexit process, the UK polls, the German polls and the geopolitical tensions in the US, the talk of an impeachment of Trump and such events which have been dominating the headlines of late and have been keeping the markets under pressure all around the world.

Looking ahead to the rest of the day, we have the German Ifo Business Climate and we also have the PMI data from Germany that will be released during the London session. We expect these to come in strong which should help to keep the DAX index well bid atleast for today. But we do not think that the index is ready to break out of its consolidation just yet and so expect some more ranging with a bullish bias for the day.