DAX Index Daily Fundamental Forecast – May 25, 2017

The DAX index continues to consolidate within a tight range, something that we had mentioned in our forecast yesterday. This ranging is happening with no danger of the index moving to either side quickly and so is expected to last for the short term. The minutes from the FOMC did not do much to shake up the markets and so we can expect the consolidation to continue for today as well.

DAX In Sleep Mode

The stock markets around the world seem to be taking  breather for this week as is quite normal when we approach the end of the month. Towards the month end, we see the volatility beginning to get lesser and lesser as the economic news and data that drive the market are no longer present. We also see the traders and the investors begin to position themselves for the new month and also for the upcoming data in the new month and this leads to a kind of stalemate in the market.

This is what we are seeing in the DAX for this week as the index trades within a tight 100 point range ever since the week began. Though the incoming data from Germany continues to throw up some good numbers, this is not enough to push the DAX higher as the investors are more intent on profit taking and setting up their positions for the new challenges that lie ahead in the new month.

Looking ahead to the rest of the day, we do not have any major news from Germany. In fact, it is a bank holiday in Germany for today and so we can expect the volatility and the liquidity to be lesser than normal. This should lead to a situation where we are likely to see more consolidation and ranging for today with a stalemate between the bulls and the bears.