The DAX index continued to trade in a strong manner during the course of the day on Friday but faced some strong selling later in the day which then pushed it lower towards the end of the day. As we have been mentioning in many of our forecasts, we expect the index to continue to trade in an up and down manner unless the political issues in Germany get sorted out or the volatility and the liquidity picks up.
DAX Likely to Stay in Range
The liquidity is unlikely to pick up as we head towards the end of the year. We have a host of events and news this week as all the central banks seem to be in a hurry to finish off their work for the year and push off for their holidays. So, we are likely to see some volatility this week though it remains to be seen whether that would mean an increase in liquidity.
The index is also likely to be influenced by the Brexit process which continues to wind its way through a twisted path. There have been reports which have talked about a deal being made out and other reports which say that the deal is still far off and so far, there is a lot of uncertainty on what is going to really happen. It is clear though that if a good deal is made out both as far as payments from the UK are concerned and also on the trade agreements, then the stock indices in Europe are likely to get a boost.
Looking ahead to the rest of the day, we do not have any major news from the Eurozone or Germany and so, expect some steady trading during the course of the day today. Unless there are any significant fundamental developments, the traders are likely to wait for the events and data from later in the week rather than take any chances today.
This article was originally posted on FX Empire
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