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DAX Index Fundamental Analysis – week of December 4, 2017

December 03
01:06 2017

The DAX index had a pretty steady week as the global stock markets were in a buoyant mode during the early half of the week and then switched to steady mode during the later half as the markets largely ignored the threats from North Korea.

DAX Consolidates in Tight Range

The missile launches and threatening statements from North Korea have become so frequent that the markets have begun to largely ignore it of late. That is the reason why we are seeing such events having lesser impact on the markets of late. The 2 events that dominated the European markets over the last week were the Germany political developments with respect to the formation of a coalition and the Brexit talks. The coalition talks continue to progress in a steady manner in Germany and it is widely expected that Merkel would be able to thrash out some deal with the other parties and continue her hold on power without the need for an election.

We also saw reports that said that a deal had been reached between the UK and the Eurozone over the Brexit process and this was a good boost to the markets last week. It is expected that some sort of deal would be announced in a week or two and this is likely to be good for the economies of both the UK and the rest of the Europe as well. We have been saying that no deal is really not a possibility for either side and this has been proved with the arrival of a deal.

Looking ahead to the coming week, we have a speech from Draghi and apart from that, the focus for the rest of the week would be on the dollar and the US stock market indices with a host of news to be released during the course of the week. We expect the index to continue to consolidate between 12900 and 13200 until a definite decision is reached in the coalition talks. When that happens, we should see the DAX index moving towards 13500.

This article was originally posted on FX Empire

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