DAX 40, AUD/USD rise while copper price range trades
Technical analysis of the DAX 40, AUD/USD while they rise and copper price range trades.
Macro update
Wall Street rebound led by tech:
United States (US) equities moved higher as technology extended its bounce from last week’s artificial intelligence (AI)-driven selloff, with the S&P 500 up 0.47% and the Nasdaq 100 gaining 0.90%, while the Dow Jones inched 0.04% higher to a second straight record close.
Software and semis power gains:
The S&P 500 software services index jumped 2.9% and the broader tech sector rose 1.6%, helped by Oracle surging 9.6% on an upgrade and NVIDIA adding 2.5%, though both benchmarks remain just below recent record highs.
Defensives lag, stock-specific pain:
Consumer staples and healthcare fell 0.86%, with sharp declines in Waters (-13.9%), Kyndryl (-54.9%) following a filing delay, and Hims & Hers (-16%) amid legal pressure from Novo Nordisk.
Asia extends the rally:
Asian equities rose for a second session, led by Japan where the Nikkei 225 jumped 2.8% to a fresh record after Prime Minister Sanae Takaichi’s election victory, while the Japanese yen strengthened and MSCI Asia ex-Japan gained 0.7%.
Dollar weakens as key data approaches:
The US dollar slid again, with the index hovering near monthly lows and USD/JPY down 0.4%, as investors looked ahead to delayed payrolls data on Wednesday, consumer price index (CPI) on Friday, and signs job growth could slow as AI lifts productivity.
Rates and policy backdrop:
Markets continue to price the first Federal Reserve (Fed) rate cut in June, while global equities pushed to fresh peaks and attention turns to potential US climate deregulation as an emerging risk for ESG-focused investors.
DAX 40 breaks through resistance line
The DAX 40's advance from its 5 February low at 24,273 has taken it to its January to February resistance line which it closed above on Monday at 25,016.
Once overcome, the 19 January high at 25,070 may be reached next, ahead of the 3 February peak at 25,098.
Immediate upside pressure should be maintained while Monday's low at 24,715 underpins.
Short-term outlook:
Bullish while above 24,266 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 hit 5-year high
AUD/USD has resumed its ascent with the January peak at $0.7094 being revisited. A rise and daily close above this level would likely push the August 2021 and August 2022 highs at $0.7106 - $0.7137 to the fore. Further up sits the January 2023 peak at $0.7158.
Potential slips may find support around the 3 February high at $0.7050.
Short-term outlook:
Bullish while above $0.6897, targeting the $0.7100-to-$0.7150 region.
Medium-term outlook:
Bullish while above $0.6897, targeting the $0.7137-to-$0.7158 area.
AUD/USD daily candlestick chart
Copper prices sidelined
The price of copper has been drifting sideways of late with ever decreasing volatility. Further range trading between last week's extremes at $5.5640 - $6.1153 remains at hand for the days ahead.
In case of a rise above $6.1153 being seen, the $6.5000 region may be back in play whereas a fall through $5.5640 would likely put the $5.5000 region on the map.
Short-term outlook:
Bullish, targeting the $6.1000 region while above $5.5640.
Medium-term outlook:
Bullish; eyes $6.5000 and potentially the $7.0000 region while trading above the early February low at $5.5640.
Copper daily candlestick chart
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