The DAX index spent most of the day yesterday trading in a narrow range just below the 13400 region as the bulls licked the wounds of the fall from the previous day. The fall was not too large but it clearly showed that the nature of the stock markets is still choppy at this point of time with no specific fundamentals to push the markets in either direction at this point of time. Under these circumstances, it is important for the traders, not to get carried away and ensure that they trade within limits.
DAX Likely to Remain Under Pressure
The weak manufacturing data from Germany a couple of days back continues to add some pressure on the DAX index and hence the effect of that is likely to continue to be felt in the markets over the short term. Also, the US stock indices are also under a bit of pressure over the last couple of days as doubts over the implementation of the tax reform bill continue to hog the market headlines.
So far, the DAX has done well to trade in a steady manner and there have been no signs as yet of any reversal in the trend. In fact, we believe that the index has a long way to go and that it is only a matter of time before the DAX begins to make all time highs almost on a daily basis. The extension of the QE and the bull run in the global stock markets have helped the index to remain buoyant for the medium term and this is likely to encourage more and more bulls to come into the markets.
Looking ahead to the rest of the day, we do not have any major news from Germany or the Eurozone but we believe that that DAX is likely to continue to consolidate and trade in a steady manner for the day. The opening is also likely to be steady and this is likely to carry on through the rest of the day.
This article was originally posted on FX Empire
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