The DAX index did not do much on Friday as it reduced itself into a tight coil which may signal a breakout anytime soon. There was not much for the DAX to feed upon and this is one of the reasons for the index to range and consolidate. We saw that there was some distinct lack of data all around the globe on Friday and this contributed to the fact that the moves were pretty slow and measured.
Waiting for a Breakout?
Most of the stock indexes around the world also presented a mixed and confused picture and this only added to the woes of the traders and the investors. The threat of the trade war continues to dominate the market headlines at this point of time but the index has been trying hard to shake it off and focus on the fundamentals of the companies that the stocks are based on. This is proving to be difficult with the risks that continue to abound in the markets and with Trump around, there is never a dull moment in the markets.
The latest has been the Brexit process and what the UK PM May and Trump think about it and that has led to speculation that there might be a change of strategy from May as she has been forced on the backfoot domestically due to challenges to her leadership. This is likely to impact the Eurozone and its markets as the leaders over there would have been expecting a smooth Brexit to happen in due course of time. Now, the situation is not so sure at this point. This is also one of the reasons why the index has been under pressure but the bottom picking traders and investors have been able to prop up the index so far.
It remains to be seen how long they would be able to do so and till the time that they manage to do it, it is likely that the global markets and their buoyancy is also likely to keep the DAX buoyant. We have entered the second half of the month and we do not have any major economic news or fundamental data for the day which means that the DAX is likely to take the cue from the global markets and trade in a mixed manner.