DAX Index Daily Fundamental Forecast

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DAX Index Daily Fundamental Forecast – December 20, 2017

Colin First

Updated Tue, Dec 19, 2017, 9:47 PM

The DAX index rose higher during initial trading yesterday as there was an improvement in the risk sentiment across the globe. The dollar was buoyed by the anticipation over the passage of the tax bill and this had led the US stock indics higher on the previous day and the DAX seemed to be under the effect of the same as it finally broke through the 13300 region during early trading yesterday and moved higher.

DAX Moves Choppy

But this turned out to be a short lived move as the index corrected towards the end of the day as the risk sentiment turned negative. Though the tax bill passed through one of the Houses, it faced a procedural glitch at the Senate which delayed the vote. This uncertainty seemed to have an opposite effect on the dollar which immediately came under pressure and the US stock indexes followed suit. All the excitement that had been built on the previous days seemed to evaporate slowly and the indices turned into red and the effect was felt on the DAX as well.

The index moved lower towards the end of the day and finished the day just above the 13200 region. Expect a similar kind of slow and bearish opening for today as the market gets into the details of the tax plan and waits for the reaction of the US stock markets to the news. So far, the dollar continues to be under pressure as of this writing and the passage of the tax bill seems to have had little impact. It remains to be seen whether this would continue to be so in the short term.

Looking ahead to the rest of the day, we do not have any major news from Germany or Eurozone for the day and so expect some consolidation around the 13200 region as the global markets await some direction. That direction is unlikely to emerge anytime soon as we head into the end of the year and a period of low liquidity and volatility.

This article was originally posted on FX Empire