DAX 40 sidelined as AUD/USD rallies and copper price slips
Technical analysis of the DAX 40 as it range trades while AUD/USD rallies and the price of copper slips.
Macro update
Oil prices surge on escalating Middle East tensions:
Brent crude oil climbed back above $100 per barrel as disruption to the Strait of Hormuz intensified supply concerns and inflation risks.
Energy shock heightens inflation and growth concerns:
Analysts warn that higher oil prices could push inflation higher and weigh on global gross domestic product (GDP) as geopolitical risks increase.
Global equities mixed amid uncertainty:
Asian markets traded unevenly while US futures edged lower, reflecting volatility driven by energy prices and conflict-related headlines.
US equities supported by tech strength:
Wall Street opened the week higher, led by gains in AI and semiconductor stocks on robust demand expectations.
UK faces rising fuel supply risks:
Ongoing disruption to global oil flows raises the likelihood of shortages and higher energy costs, adding upside pressure to UK inflation.
Central banks in focus amid volatility:
Markets continue to assess the policy outlook, with the Reserve Bank of Australia (RBA) delivering a second consecutive 25bp hike and major central banks navigating rising energy-driven inflation pressures.
Geopolitical risks remain elevated:
Iran warned it could intensify missile strikes and threatened oil flows through the Strait of Hormuz, underscoring ongoing volatility despite hopes of de-escalation.
DAX 40 sidelined
The DAX 40 is stuck in a sideways range within Friday's 23,762 - 23,294 extremes, a break out of which is likely to determine the short-term trend.
A rise above 23,762 may lead to the 10 March high at 24,061 being reached whereas a fall through 23,294 may push the 23,000 region to the fore.
Short-term outlook:
Bullish while above last week's low at 23,294.
Medium-term outlook:
Neutral with a slightly bullish stance while above the 9 March low at 22,928.
DAX 40 daily candlestick chart
AUD/USD bounces back following rate hike
AUD/USD has swiftly bounced off this week's $0.6980 low amid the RBA's second 25 basis point rate hike in as many months. The next upside target is the 23 February high at $0.7112, followed by the $0.7129 - $0.7136 region.
Minor support may be spotted around the 20 February low at $0.7016.
Short-term outlook:
Bullish while above the early March $0.6945 low, targeting the $0.7147 - $0.7158 area.
Medium-term outlook:
Bullish while above $0.6897, eyeing the January 2023 peak at $0.7158.
AUD/USD daily candlestick chart
Copper price slips
The price of copper is seen coming off Monday's $5.8585 high and is about to test minor support at the early March $5.7465 low. If slipped through, the $5.7000 region may be revisited.
Short-term outlook:
Neutral while holding above the early February $5.5640 low.
Medium-term outlook:
Neutral while trading above the early February $5.5640 low but below its late February $6.1413 peak.
Copper daily candlestick chart
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