DAX Index Fundamental Analysis – week of June 19, 2017

The DAX has a very volatile and choppy trading week, in line with most of the major stock markets around the world which were swayed this way and that over the course of the week by the economic data and then by the Fed. But as far as the DAX is concerned, all this volatile action did not mean much as it closed the week almost at the same place where it began and the more important focus for the DAX was the fact that it could not break the highs of its range despite all the volatility.

DAX Has a Volatile Week

The DAX began the week slowly and this continued till the middle of the week as the investors were worried about the Fed and did not want to commit themselves in any direction before knowing what the Fed was upto. But the incoming data from the US was very weak and this raised the possiblity that the Fed could have a rethink of the interest rate hikes and this pushed the DAX index towards its highs just beyond the 12900 region.

But this did not last long as the Fed came along and decided that it would brush off all the latest economic data and hence hiked the rates as expected and then also issued a hawkish statement opening the door for further rate hikes this year. This led to a sell off in the stock markets and the DAX immediately fell and closed the day within the usual range. The index continued to consolidate and trade within the range for the rest of the week.

Looking ahead to the coming week, it is the second half of the month when the economic data dries up and except for some PMI data, we do not have any major news from Germany. So, we can safely expected the consolidation and ranging below the 12900 region to continue in the upcoming week.