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DAX 40 capped as AUD/USD, copper advance
Technical analysis of the DAX 40 as it struggles with resistance while AUD/USD, copper prices rise.
Macro update
Wall Street slides on AI anxiety:
United States (US) stocks fell as investors worried artificial intelligence (AI) could intensify competition and compress margins for software firms, with sentiment fragile ahead of Alphabet and Amazon earnings.
Tech and software lead losses:
Nvidia and Microsoft dropped almost 3%, while Salesforce, Datadog and Adobe fell about 7% and Intuit slumped 11%, dragging the S&P 500 software and services index down 3.8% for a fifth straight session.
Mixed AI winners and losers:
Palantir jumped nearly 7% after strong results, bucking the sell-off, while Advanced Micro Devices (AMD) slipped 1.7% ahead of earnings and PayPal plunged 20% on a weak 2026 profit outlook.
Healthcare hit by Novo warning:
Obesity drugmakers sold off after Novo Nordisk warned of a steep sales decline, sending its US-listed shares down almost 15% and weighing on Eli Lilly and smaller peers.
Headline index moves:
The S&P 500 fell 0.84%, the Nasdaq 100 dropped 1.43% and the Dow Jones lost 0.34%, though Walmart rose about 3% to become the first brick-and-mortar retailer to reach a $1 trillion valuation.
Asia echoes software rout:
Japan’s Nikkei 225 slipped 0.78% after its recent record high, as software and chip-related stocks fell sharply, mirroring the global sell-off linked to AI disruption fears.
DAX 40 capped by 25,020-to-25,098 resistance zone
The DAX 40's advance from its late January low ran out of steam around its 27 January high at 25,020, at 25,098. This resistance area would need to be overcome for the January record high at 25,508 to be back in the picture.
While the 25,020 - 25,098 resistance area caps, a slide back towards the 24,474 - 24,266 region may ensue. It consists of the 12 December high and 21 - 29 January lows.
Short-term outlook:
Bullish while above Monday's 24,266 low but needs to rise above 25,098 to confirm.
Medium-term outlook:
Bullish while above the 29 January low at 24,266.
DAX 40 daily candlestick chart
AUD/USD trades near 5-year high
AUD/USD seems to have resumed its ascent with the January peak at $0.7094 being in focus, provided that no bearish reversal takes the cross below this week's low at $0.6909.
Above $0.7094 sit the August 2021 and August 2022 highs at $0.7106 - $0.7137.
Short-term outlook:
Bullish while above $0.6909, targeting the $0.7100 region.
Medium-term outlook:
Bullish while above $0.6593, targeting the August 2022 high at $0.7137.
AUD/USD daily candlestick chart
Copper resumes its ascent
The copper price's swift recovery off Monday's $5.5640 low is encouraging for the bulls with the mid-January high at $6.1543 being in view. if overcome, the $6.5 region may once again be in focus.
Immediate minor support may be found around the 26 January high at $6.0338 and further support between the 19 January and 28 December highs at $5.9370 - $5.9235.
Short-term outlook:
Bullish, targeting the $6.5 region while above $5.5640.
Medium-term outlook:
Bullish; eyes $6.5 and potentially the $7 region while trading above the 29 December low at $5.5413.
Copper daily candlestick chart
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