DAX 40 hits all-time high as AUD/USD bounces off support and copper price consolidates

Macro update

Dow Jones reaches another record high after weak US jobs data: The Dow closed at a fresh all-time high after June's non-farm payrolls report showed just 57,000 jobs were created, well below forecasts of 110,000, easing concerns over near-term Federal Reserve tightening and securing the index's fourth consecutive weekly gain.

Semiconductor sell-off weighs on the Nasdaq: The Philadelphia Semiconductor Index dropped 5.4% as investors locked in profits following this year's strong rally, with Nvidia and SanDisk among the biggest decliners, although Apple advanced on reports of upcoming iPhone launches.

Asian equities rebound as softer US data boosts sentiment: MSCI's Asia-Pacific index excluding Japan gained 2.2%, while South Korea's KOSPI jumped more than 6% as weaker-than-expected US employment data and stronger regional PMI readings fuelled a recovery in chipmaker shares.

Oil prices edge higher as shipping through Hormuz resumes: Brent crude rose above $72.00 a barrel and WTI climbed to around $69.00 as tanker traffic gradually resumed through the Strait of Hormuz under the US-Iran agreement, although increased Gulf production continued to keep the futures curve in contango.

Dollar posts its sharpest weekly decline since April: The dollar index fell around 0.6% over the week as expectations of further Federal Reserve rate hikes eased, lifting the euro to a two-week high and helping sterling record its strongest weekly performance in almost three months.

Yen intervention concerns remain despite recovery: Japan's finance minister reiterated that authorities stand ready to support the currency after it rebounded from a 40-year low, with analysts suggesting policymakers may adopt a more targeted intervention strategy to discourage speculative trading.

DAX 40 trades in record high

The DAX 40 benefitted from rotation out of expensive US technology stocks ahead of the US' prolonged Independence Day weekend and hit a new all-time high.

The next upside targets are the minor psychological 26,000 mark, followed by the 161.8% Fibonacci extension of the October 2022-to-May 2024 bull market, projected higher from the August 2024 low at 28,400.

In case of a retracement being seen, the area around the January and May peaks at 25,438-to-25395 may offer support.

Short-term outlook: bullish while above the 26 June low at 24,557

Medium-term outlook: bullish while above the 30 April low at 23,716

DAX 40  daily candlestick chart

AUD/USD bounces off support

AUD/USD's descent has taken it to a three month low at $0.6865 - to its early April low and 200-day simple moving average (SMA) at $0.6865-to-$0.6860 - before bouncing back.

The May-to-July downtrend channel resistance line at $0.6956 may act as minor resistance ahead of the 13 April and 11 June lows at $0.6979-to-$0.6988.

Were the recent decline to resume and a fall through support at $0.6865-to-$0.6860 to ensue, the late March trough at $0.6834 may be revisited.

Short-term outlook: bullish while above the $0.6865-to-$0.6860 support zone

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 consolidates

Copper's decline to its late June $5.8951 low has been followed by a gradual recovery to this week's $6.2309 high. Further sideways trading between these extremes seems to be at hand.

A fall through this week's low at $6.0000 may push the late June low and 200-day simple moving average (SMA) at $5.8951-to-$5.8461 to the fore whereas a rise above $6.2309 would push the 21 June high at $6.3672 to the fore.

Short-term outlook: neutral while below the 30 June high at $6.2309 but above the 24 June low at $5.8951

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