DAX 40, AUD/USD and copper give back recent gains as Fed rate cut hopes fade
Technical analysis of the DAX 40, AUD/USD and copper as they slide amid hawkish Fed comments, dimmed rate cut hopes and the end of the US government shutdown.
Macro update
Wall Street tumbles:
US equities posted their steepest decline in more than a month, with the S&P 500 dropping 1.66% and the Nasdaq 100 falling 2.29% as losses in major artificial intelligence (AI) names dragged the market lower.
Big-tech selloff deepens:
Nvidia slid 3.6%, Tesla fell 6.6% and Broadcom dropped 4.3% as investors reassessed lofty valuations across the sector.
Rate-cut hopes dim:
Hawkish remarks from Federal Reserve (Fed) officials pushed the probability of a December rate cut toward 50%, pressuring equities, bonds and the US dollar.
Clear sector rotation:
Consumer discretionary and technology stocks led the declines, while value shares outperformed growth over the week.
Global risk-off tone:
Asian and European futures softened and Treasury yields edged higher as investors awaited delayed US economic data following the end of the shutdown.
DAX 40 is falling back
The DAX 40 index is rapidly coming off its 13 November 24,441 high and is expected to hit the 55-day simple moving average (SMA) at 23,991 and perhaps also the 23,900 region.
Minor resistance may be spotted around the 3 November high at 24,248.
DAX 40 daily candlestick chart
AUD/USD comes off two-week high
AUD/USD swift drop from Thursday's $0.6580 high is taking the cross back to its late September $0.6521 low.
If fallen through, the $0.6500 region is expected to be revisited.
Were a rise above the 55-day SMA at $0.6557 to be seen, though, a resistance line at $0.6581 may be tested.
AUD/USD daily candlestick chart
Copper continues to grind higher
The price of copper is short-term consolidating below its 13 November high at $5.1625, a rise above which would put the mid-October high at $5.1790 on the map.
Further up lies more significant resistance between the early and late October highs at $5.2608-to-$5.2788.
Were the 12 November low at $5.0338 to give way, though, a slip towards the 55-day SMA at $4.9840 would likely ensue.
Copper daily candlestick chart
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