DAX 40 falls out of bed while AUD/USD, copper price recover

Macro update

Oil prices rally as tensions in the Gulf escalate: Brent crude climbed above $80 a barrel for the first time since 22 June, rising 1% to $78.85 on Thursday and extending its weekly gain to 9%, after the US launched strikes on around 90 Iranian military targets and President Trump declared the interim peace agreement had come to an end.

Global bond yields rise as inflation concerns return: Higher energy prices reignited fears of persistent inflation, pushing Japan's 10-year government bond yield to 2.9%, its highest level since 1996, while Australia's 10-year yield reached a one-month high of 4.933% and US Treasury yields climbed to seven-week highs.

Markets increase expectations of further Fed tightening: Futures now imply an 87% probability of at least one Federal Reserve rate hike this year after minutes from June's meeting under Chair Kevin Warsh revealed a more hawkish tone, with several policymakers arguing that conditions already warranted higher interest rates.

Technology shares supported by gains in chipmakers: Nvidia advanced 3.65% on Wall Street following reports that China will allow its leading AI companies to purchase a limited number of H200 chips, helping the Nasdaq edge 0.2% higher, although enthusiasm for semiconductor stocks faded during Asian trading.

Nikkei ends three-day losing streak: Japan's benchmark index rose 1.5%, led by a 9.4% jump in Kioxia and a 6.4% gain in Advantest, while South Korea's KOSPI reversed from a 4% advance to a 1% decline as gains in Samsung and SK Hynix faded.

Gold weakens as higher rate expectations weigh: Spot gold slipped 0.2% to $4,068 an ounce, hovering near a one-week low as investors priced in a higher-for-longer interest rate environment, prompting Bank of America to lower its 2026 average gold price forecast by 14% to $4,360 an ounce.

DAX 40 comes off record high

The DAX 40's swift ascent to its 6 July 25,900 record high has been followed by a just as rapid decline to this week's 24,830 low. In case of a fall through it, the mid-June low at 24,764 would likely be next in line, possibly followed by the 24 June low at 24,594 and the 26 of June trough at 24,548.

Resistance may now be spotted around the mid-June high at 25,110 and between the 19-to-22 June highs at 25,173-to-25,176.

Short-term outlook: bearish while below the 22 June high at 25,176

Medium-term outlook: bullish while above the 10 June low at 24,044

DAX 40  daily candlestick chart

AUD/USD range trades

AUD/USD continues to range trade above its 200-day simple moving average (SMA) at $0.6872 and its three month low at $0.6865.

The cross is in the process of testing the upper May-to-July downtrend channel resistance line at $0.6942, a rise above which and this week's peak at $0.6960 may lead to the 13 April and 11 June lows at $0.6979-to-$0.6988 to be revisited.

Were the recent decline to resume and a fall through Wednesday's low at $0.6907 to unfold, support at $0.6865 may be retested. Failure there may engage the late March low at $0.6834.

Short-term outlook: neutral while above $0.6865 but below $0.6960

Medium-term outlook: neutral while below the $0.7088 mid-June peak but above the 30 March $0.6834 low 

AUD/USD daily candlestick chart

Copper price bounces back

The price of Copper's still range trades above its late June $5.8951 low and is currently seen bouncing off this week's $5.9835 low towards its June-to-July resistance line at $6.1642. If bettered, the 7 July high at $6.1994 would be back in sight, followed by the late June high at $6.2309.

Minor support above this week's low sits at the 1 July low at $6.0000.

A fall through this week's low at $5.9835 may put the late June low and 200-day simple moving average (SMA) at $5.8951-to-$5.8721 to the fore whereas a rise above $6.2309 would likely engage the 21 June high at $6.3672.

Short-term outlook: neutral while below the 30 June high at $6.2309 but above the 8 July low at $5.9835

Medium-term outlook: neutral while trading above the 4 May $5.7732 low but below the $6.6367 early June peak

Copper daily candlestick chart