DAX 40 hits record high, copper price sits near all-time high as AUD/USD rallies further
Technical analysis of the DAX 40 as it hits a record high, copper price sits near its all-time high while AUD/USD rallies further.
Macro update
Wall Street hits fresh records:
US equities closed higher as renewed AI enthusiasm boosted chipmakers, with the Dow Jones notching a new all-time high while the S&P 500 rose 0.62%, the Nasdaq 100 gained 0.65% and the Dow advanced 0.99%.
AI lifts semiconductors:
Memory and storage stocks rallied after Nvidia unveiled new AI processors incorporating additional storage layers, driving SanDisk, Western Digital, Seagate and Micron to record levels and pushing the SOX index up 2.75%.
Company-specific moves:
Moderna surged almost 11% following an upgrade from Bank of America, cooling-system stocks fell after Nvidia highlighted improved chip efficiency, and American International Group (AIG) dropped 7.5% after announcing the planned departure of its CEO.
Valuations and data in focus:
The S&P 500 is trading near 22 times forward earnings, above its five-year average, with investors watching JOLTS, ADP payrolls and Friday’s jobs report for signals on the timing and pace of Federal Reserve (Fed) rate cuts.
Oil pressured by geopolitics:
Crude prices extended losses after the US moved to release up to 50 million barrels of Venezuelan oil following the capture of President Maduro, weighing on energy stocks despite broader market strength.
Asia and Europe mixed:
Asian markets declined, led by Japan after China imposed export bans on dual-use goods, while European futures were broadly flat, gold hovered near record highs and industrial metals remained elevated.
DAX 40 trades in record highs around the 25,000 mark
The DAX 40 index hit yet another record high and has risen to the 25,000 psychological resistance zone which may stem the advance on Wednesday. Further up lies the 25,100 area which may also be reached.
Good support below Tuesday's 24,836 low may be spotted around the 9 October peak at 24,771.
Short-term outlook:
Bullish while above the 5 January low at 24,640
Medium-term outlook:
Bullish while above the 18 December low at 23,924
DAX 40 daily candlestick chart
AUD/USD trades in 1 1/4 year highs
AUD/USD's rally is ongoing with it so far having risen to $0.6766, a level last traded in October 2024. If bettered, the July 2024 high at $0.6798 will be next in line.
Support may be found around the late December highs at $0.6727-to-$0.6717.
Short-term outlook:
Bullish while above $0.6660, eyeing the $0.6800 region
Medium-term outlook:
Bullish while above $0.6593, target the July 2023 high at $0.6895
AUD/USD daily candlestick chart
Copper retraces from record high
The price of copper has come off its $6.1123 Tuesday record high and revisited its late December high at $5.9235 which is acting as support. Whilst it continues to do so, the $6.5000 region remains in sight.
A slip through $5.9235 may put the $5.8000 region on the cards.
Short-term outlook:
Bullish, targeting the $6.5000 region while above $5.6678
Medium-term outlook:
Bullish; eyes $6.5000 and potentially the $7.0000 region while remaining above the 29 December low at $5.5413
Copper daily candlestick chart
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