DAX 40 slips as AUD/USD and copper price grind higher
Technical analysis of the DAX 40 as it declines while AUD/USD and the copper price grind higher.
Macro update
Wall Street slides on AI and tariff concerns:
US indices finished more than 1% lower, with the Dow Jones falling 1.66%, the S&P 500 down 1.04% and the Nasdaq 100 off 1.13%, as investors reduced exposure to risk assets.
Bitcoin briefly dips below $63,000:
The cryptocurrency dropped sharply during the sell-off, slipping under the $63,000 mark before stabilising, mirroring broader risk aversion.
Trade tensions and AI disruption weigh on sentiment:
President Trump floated a temporary 15% tariff after the Supreme Court struck down earlier measures, while fears of artificial intelligence (AI)-driven disruption hit financials, down 3.3%, and software stocks, down 4.3%.
Defensives offer relative shelter:
Gold climbed 2.6% on safe-haven demand, healthcare rose 1.2% with Eli Lilly up 4.9%, and consumer staples were among the few sectors to advance.
Earnings season nears completion:
About 73% of S&P 500 companies have exceeded expectations, with aggregate fourth-quarter earnings growth now projected at 13.9%, as NVIDIA's results loom on Wednesday.
Asia mixed as oil advances and yen softens:
Japan’s Nikkei 225 rose 0.9% on renewed AI optimism, the Japanese yen weakened to around 155 per US dollar amid tariff uncertainty, and Brent crude oil edged toward $72 a barrel on US-Iran tensions.
DAX 40 comes off February high
The DAX 40 is slipping once again, having come off last week's 25,331 high.
A slip through Monday's low at 24,938 may push the mid-February low at 24,734 to the fore.
Above 25,331 lies the January record high at 25,507.
Short-term outlook:
Toppish while below 25,331, last week's high.
Medium-term outlook:
Bullish while above the 5 February low at 24,491.
DAX 40 daily candlestick chart
AUD/USD consolidates below multi-year high
Over the past week or so AUD/USD has been gradually coming off its mid-February $0.7147 multi-year high but found support at last week's $0.7016 low. While it underpins, upside pressure is expected to remain in play.
A rise above Monday's $0.7112 high may put this year's peak at $0.7147 back on the cards. Above this level sits the January 2023 high at $0.7158.
Short-term outlook:
Neutral with a bullish bias while above $0.7016, targeting the $0.7147 - $0.7158 region.
Medium-term outlook:
Bullish while above $0.6897, targeting the January 2023 peak at $0.7158.
AUD/USD daily candlestick chart
Copper range trades
The copper price has been drifting higher from last week's $5.6280 low with last week's high at $5.9045 having to be exceeded for the late December high at $5.9235 and the 19 January peak at $5.9370 to be reached next.
Bullish momentum should prevail while Monday's low at $5.7508 underpins.
Short-term outlook:
Bullish, drifting higher towards the $6.0000 region.
Medium-term outlook:
Neutral while above support at $5.5950 - $5.5413; a fall through the late December low would turn the outlook to a bearish one, though.
Copper daily candlestick chart
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