DAX Index Fundamental Analysis – week of September 18, 2017
The DAX index broke higher on the first day of last week but it could not make much headway beyond that and spent the rest of the week in a consolidation mode and ranged during the course of the week though the ranging happened near the highs of the range. This points to some underlying strength in the DAX which should help to encourage the bulls in the short term.
DAX Breaks Through Higher
The index broke through the important resistance region around 12350 which had served as the range highs over the last few weeks. This happened on the back of improved risk sentiment and also due to the fact that the missile launch from North Korea did not happen and this helped to settle some nerves. Also, the US stock markets were buoyed by reports saying that Trump was reaching out to the opposition in a bid to get some of his bills like the ones on heathcare reform and tax reform, passed through and this cheered the markets.
The effect of the cheer in the US markets percolated through to the other lobal markets as well and even some missile testing from North Korea later in the week did not have much of an impact on the stock markets. The index also awaited the Germany elections that are scheduled for later in the month and the investors and traders do not want to commit themselves with an election at hand in the short term.
This should ensure some consolidation and ranging to happen in the coming week which does not have much data from Germany or the Eurozone. Though Merkel is set to become the President again, the markets would want to confirm that news before it starts moving again and that is why we believe that the consolidation is likely to continue with a bullish bias.
This article was originally posted on FX Empire