DAX Index Fundamental Analysis – week of August 28, 2017

The DAX index has been finding itself pushed to a corner as it does not seem to have the legs or the supporting fundamentals to move in any specific direction at this point in time. It is clearly being guided by the global stock markets and the markets all around the world have been pretty much choppy over the last few weeks due to the lack of fundamental drivers. This is likely to continue in the short term and hence it would be good for the traders to get themselves used to such choppiness.

DAX Still Choppy, Likely to Continue So

Last week was another week where the index consolidated and ranged for the whole week with no direction. While it waited for some direction for the first half of the week as it looked towards the meeting at Jackson Hole, the outcome of the meeting also did not do much to help it break the range and it ended the week in the middle of its weekly range, basically confirming that it has no intention to move in any specific direction.

We are now close to the end of the month and the month of September is likely to be interesting as the Germans get ready for their elections. So far, Merkel has a clear lead in all the opinion polls and it looks as though she might win the elections easily and continue her iron grip on Germany and the rest of the Eurozone as well. The markets would like to have a confirmation of this before we see the buyers coming back into the DAX again and this is likely to lead to some consolidation in the weeks leading up to the elections.

Looking ahead to the coming week, we do not have any major news from Germany for the week and we expect this choppiness to continue in the coming week though he global stock markets would look forward to the NFP data from the US to see if it can continue the economic recovery which would help to bring the next rate hike into the picture. The DAX is unlikely to be affected too much by that data at this point in time and hence expect some more consolidation between 12000 and 12350 in the upcoming week.