DAX 40 dips as AUD/USD, copper price consolidate below highs
Technical analysis of the DAX 40 as it dips while AUD/USD and the price of copper consolidate below their respective highs.
Macro update
Asian equities reverse from highs: Shares in Japan, South Korea and Taiwan initially reached fresh highs before turning lower, with MSCI Asia-Pacific ex-Japan down 0.5% and the Nikkei falling 0.9% as risk sentiment weakened.
Oil-driven pullback: Brent crude rose around to $100 per barrel, extending gains as renewed disruption in the Strait of Hormuz lifted energy prices.
Geopolitics intensify: Iran seized two vessels in the strait while both Tehran and Washington maintained shipping restrictions, leaving roughly 20% of global oil flows constrained and peace talks stalled.
Wall Street resilience: US indices closed at record highs overnight, with the S&P 500 up 1% and the Nasdaq gaining 1.6%, supported by strong early earnings despite rising energy costs.
Rates and FX: Treasury yields edged higher alongside oil, while the dollar held near a one-and-a-half-week high on safe-haven demand, with the euro steady near recent lows.
Policy outlook and commodities: Higher oil prices are reinforcing inflation concerns and pushing back expectations for Fed rate cuts, while gold fell 0.7% as rising yields reduced its appeal.
DAX 40 is gliding lower
The DAX 40 is seen sliding back towards its 200-day simple moving average (SMA) at 24,117 and its 10 March high at 24,061.
Immediate minor resistance may be spotted around the late January 24,266 low and the 5 February 24,273 trough. If overcome, the 5 March high at 24,366 may be revisited ahead of the 21 April high at 24,607.
Short-term outlook: bearish while below the 21 April 24,607 high
Medium-term outlook: bullish while above the 13 April low at 23,482
DAX 40 daily candlestick chart
AUD/USD range trades below multi-year highs
AUD/USD's sharp advance from its late March $0.6834 low has so far taken it to $0.7222 - a 3 3/4 year high - before consolidating below this level. If exceeded, the 7 February 2022 high at $0.7249 may be reached.
Support sits at Monday's $0.7117 low, below which lies the 24 March high at $0.7100.
Short-term outlook: bullish while above the 13 April $0.6988 low
Medium-term outlook: bullish while above the 30 March low at $0.6834
AUD/USD daily candlestick chart
Copper price consolidates below 11-week high
The Copper price continues to oscillate between its $6.1505 11-week high and this week's $5.9653 low. While it holds, the $6.1543 mid-January high remains in focus.
Further up sits the January peak at $6.5828.
Only a slip through this week's low at $5.9653 may push the 10 March high at $5.9623 and 10 April peak at $5.9360 to the fore.
Short-term outlook: bullish while holding above the 21 April $5.9653 low
Medium-term outlook: bullish while trading above the 9 April $5.6918 low
Copper daily candlestick chart
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Follow us online
