DAX 40 remains under pressure while AUD/USD tries to find support and copper advances
Technical analysis of the DAX 40 remains under pressure while AUD/USD tries to find support and copper advances.
Macro update
US equities slide:
Wall Street closed lower, with the S&P 500 and Nasdaq 100 falling to three-week lows as renewed concerns over AI funding and heavy capital spending weighed on technology stocks.
Tech under pressure:
Oracle dropped 5.4% after a $10bn data centre project was reported to be in doubt, dragging on broader AI-linked names including Nvidia and Broadcom.
Index performance:
The Dow Jones fell 0.47%, the S&P 500 lost 1.16% and the Nasdaq declined 1.81%, reflecting risk aversion concentrated in growth stocks.
Asia follows Wall Street:
Asian markets were weaker, led by Japan where the Nikkei 225 slid to a three-week low as tech shares fell amid similar concerns over AI profitability and data centre investment.
Energy bucks trend:
Oil stocks rose as crude prices climbed on fresh geopolitical tensions involving Venezuela and Russia, partly offsetting losses elsewhere.
Central bank focus shifts:
Attention now turns to US inflation data and the Bank of England (BoE) meeting, where markets expect a 25bp cut after UK inflation fell to 3.2%.
DAX 40 comes off December peak
The DAX 40 index - which last Friday hit a two-month high at 24,474 - is sliding amid general risk-off sentiment with the late November high at 23,884 being in focus.
Minor resistance sits at the 10 December 24,001 low.
Short-term outlook: toppish while below the 16 December 24,191 high
Medium-term outlook: neutral while below the 24,441-to-24,474 November-to-December highs but above its 200-day simple moving average (SMA) at 23,585
DAX 40 daily candlestick chart
AUD/USD tries to stem its decline
AUD/USD's bearish reversal off its 10 December $0.6686 high has so far taken it to Thursday's $0.6593 low from which it is trying to recover towards the $0.6617 late October peak.
Together with the 21 November low at $0.6422 and the early October high at $0.6629 it is likely to act as a resistance zone.
Only if overcome, could the current December peak at $0.6686 be revisited with the September high at $6707 representing another upside target.
Short-term outlook: bullish while above $0.6593, eyeing key resistance at $0.6686-to-$0.6707; a drop through $0.6593 would make us bearish, though, and target the mid-November high at $0.6580
Medium-term outlook: bullish while above $0.6553, eyeing the September high at $0.6707, a rise above which would lead to the $0.6723-to-$0.6767 being in focus
AUD/USD daily candlestick chart
Copper remains short-term bid
The price of copper has come off its $5.5308 12 December high but found support a day later at $5.2802. While this level holds, the short-term trend remains bullish, targeting the $5.5000 region and above.
A fall through $5.3140 may lead to the early and late October highs at $5.2788-to-$5.2608 being revisited, though.
Short-term outlook: bullish, targeting the $5.5000 region while above $5.3140
Medium-term outlook: bullish; eyes $5.5308 and potentially the $6.0000 region while staying above the mid-December low at $5.2802
Copper daily candlestick chart
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