The DAX index continues to trade in the sub-12300 region and the same was the case on Friday as well. The index did try to make a break for it through the 12300 region for a brief while but this move was promptly sold into and we saw the prices push back through the 12300 region again and settle below it to end the day.
DAX Under 12300
The same kind of consolidation and ranging is expected to continue as the stock markets in the Eurozone continue to remain under pressure for a variety of reasons. This is in contrast to the US stock indices and also some of the Asian stock markets which have managed to move higher over the last few weeks despite some risky geopolitical developments but the DAX has been unable to shrug off the same. It has been hit hard by the incoming data from the Eurozone which continues to be weak. Germany is one of the biggest backers of the Eurozone concept and is the engine of the Eurozone and anything that hits the Eurozone is likely to have a deep impact on Germany.
The data from Germany continues to be good, as always but it is the impact from the rest of the Eurozone that has been hitting the DAX hard. Also, the trade war risk continues to loom over the stock markets around the globe. It started off as a trade war between the US and China but it has continued to grow and expand into the other regions and it appears as though it would begin to impact the Eurozone as well which would only make the economic situation worse than what it is now.
Looking ahead to the rest of the day, the US stock indices closed with slight gains for the day and the Asian markets are also bit weak today and hence we can expect a sluggish opening to the DAX index for today. This is likely to continue for the rest of the day until the US session begins which should then guide the DAX though we do not expect any bullishness at this point.
This article was originally posted on FX Empire