DAX 40, AUD/USD and copper price under pressure

Macro update

Wall Street extends its decline as inflation remains elevated: The S&P 500 fell 1.6% and the Nasdaq lost 2.0% on Wednesday, with semiconductor stocks continuing to weaken after US consumer inflation rose 4.2% year-on-year in May, matching expectations but marking the fastest pace since April 2023.

Oracle drops in after-hours trading on spending plans: Shares declined 8.9% after the company projected fiscal 2027 capital expenditure above Wall Street forecasts and unveiled plans to raise almost $40 billion through debt and equity issuance to finance its expanding AI infrastructure investments.

Asian equities retreat amid technology sector concerns: MSCI's Asia-Pacific index excluding Japan fell 1%, while Taiwan's benchmark and Japan's Nikkei each declined 1.5%, as investors grew increasingly cautious over elevated valuations across regional technology stocks.

South Korea's KOSPI experiences sharp volatility: The index fluctuated between gains and losses, falling by as much as 4.4% before trimming losses to trade down 1.2%, as AI-related shares struggled to stabilise after declining in five of the previous six sessions.

Oil prices climb on renewed geopolitical tensions: Brent crude gained to $93.80 a barrel following fresh US strikes on Iran and Tehran's announcement that it would close the Straits of Hormuz, raising concerns over a potential disruption to global energy supplies.

Dollar holds firm while euro edges higher before ECB meeting: The dollar index remained steady around 100.0, while the euro rose 0.1% to $1.1547 ahead of the European Central Bank's policy decision, with markets expecting a rate hike and pricing in more than three additional 25-basis-point increases through March 2027.

DAX 40 under pressure

The DAX 40 has been retreating over the past couple of weeks but is trying to find interim support around the 200-day simple moving average (SMA) at 24,179.

In case of further slips being seen, the late April-to-May lows at 23,797-to-23,716 may be revisited.

For a bullish reversal to be seen, a rise and daily chart close above Wednesday's high at 24,517 would need to unfold.

Short-term outlook: bearish while trading below the 10 June high at 24,517

Medium-term outlook: neutral while above the 30 April low at 23,716 but below the 25,438 May peak

DAX 40  daily candlestick chart

AUD/USD trades in one-month lows

AUD/USD's slide has so far taken it to a one-month low close to the 13 April $0.6988 trough which may offer support. If not, the $0.6980-to-$0.6945 region may be reached next.

For a move back up towards the 55-day simple moving average (SMA) at $0.7112 to be seen, a bullish reversal would need to overcome resistance at the 19 May $0.7080 low.

Short-term outlook: bearish while below its 19 May low at $0.7080

Medium-term outlook: neutral while below the $0.7277 May peak and above the 30 March $0.6834 low

AUD/USD daily candlestick chart

Copper price glides towards support

Copper's retracement from its recent highs at $6.6328-to-$6.6367 has taken the metal below its late May low at $6.1805 which now acts as minor resistance.

A fall through Wednesday's $6.1251 low would likely push the 19 May low at $6.0806 to the fore. Further down lies minor potential support around the 21 April $5.9653 low.

A rise above the 7 June low at $6.1854 is needed for a recovery towards the $6.4146-to-$6.4211 to be witnessed. 

Short-term outlook: bearish while below the 9 June high at $6.4146

Medium-term outlook: bullish while trading above the 19 May $6.0806 low

Copper daily candlestick chart