DAX Index Daily Fundamental Forecast – November 20, 2017

The DAX index has been clearly under pressure over the last week and we are likely to see a very bad opening to the DAX today as well due to the failure of the coalition talks in Germany. The DAX closed the last week below the 13000 region and it looks as though it was a premonition of what was to come this week. Though it had seemed to be moving down on the back of global cues, now it looks as though it might have moved down due to the news of the breakdown being leaked out.

DAX Likely to See Bloodbath

After consolidating in the highs of the range near the 13500 region, the index has been moving down over the last 2 weeks. We had been confident that the coalition talks were progressing well and thats what the media reports led us to believe and thats what the market also seemed to believe. Though the incoming data had been strong, it was clear that the strong data was not being enough to push up the inflation and this had kept the pressure on the DAX which led it towards the 13000 region.

Today morning, the world woke up to the news that one of the coalition parties, the FPD, had walked out of the coalition talks with Merkel and now the government has been thrown into a lot of confusion and uncertainty. Though Merkel has been making efforts to reach out to other parties, a new election seems on the horizon and the result of that could swing either way. Whatever that is, it is not good news for the DAX and we could see some bloodbath in the index today. If there are any bulls out there, it is going to be difficult to save them today.

This piece of news is likely to dominate the trading for the rest of the day as the German traders and investors get a chance to have their say on the situation through the markets. We expect a very weak opening for the index which is likely to continue for the rest of the day. It is not going to be a day for the bulls.