DAX Daily Fundamental Forecast – January 24, 2017

The DAX traded within a tight range yesterday as the markets all over the world consolidated with no specific direction as they wait for some push from somewhere to move them this way or that. We had mentioned this in our forecast yesterday as well that though the DAX continue to trade strongly, there is no real push from any side and the bulls and the bears seem to be unable to commit themselves to investing or trading. While the bulls are worried about pushing the index too far at these highs, the bears also do not want to take a risk in selling at this juncture as the global stock markets continue to trade in the higher parts of the range and they still seem to have some fuel left to move further higher.

As a result of this, there seems to be a kind of deadlock among the bulls and the bears which has controlled the index over the last week or so and has kept the index within a tight range. We have the bottom of this range at 11400 and try as they might, the bears have been unable to break this bottom and the bulls have been so strong that we have seen the index visit the lows of this range only one during the last 2 weeks. The rest of the time, the DAX has been spending near the highs of its range above 11600. But, on the other hand, the bulls have also found it difficult to push the index towards the target at 12000 and beyond as global fears and risks surrounding the Brexit process and the new administration in the US continues to weigh on the stock markets around the world.

Looking ahead to today, we have the PMI data from Germany and we also have the SC court ruling in the UK on its EU membership and we expect the volatility from the UK to spill over into the other markets of the eurozone as well.