Technical Analyst, Saxo Bank
Summary: DAX testing key support. FTSE 100 and FTSE 250 has taken key supports out and are set for lower levels.
GER40, UK100 & UK250 mid levels in this article
DAX has been testing key support at around 14.906 this morning following a massive sell-off. Now back above 15K further rebound could be seen.
However, if daily RSI closes the day below 40 threshold (at the time of writing is below) it will be showing negative sentiment which indicates lower DAX levels.
A Dax close below 14.906 could fuel a sell-off down to around 0.382 retracement at 14,238 but there is no strong support until around 13,791.
To reverse this bearish scenario a close above 15.707 is needed.
GER40 cfd is testing key support at around 14,902 having dipped bellow in early session. At the time of writing RSI is below 40 i.e., in negative sentiment indicating lower levels. GER40 has been showing RSI divergence for several weeks by now strongly indicating an exhaustion of the uptrend.
For GER40 to reverse the bearish trend – bearish trend will be confirmed if it closes below 15,231 and further confirmed by a close below 14,902 – a close above 15,636 is needed.
FTSE 100 has broken below key strong support at around 7,708 finding support at the 100 Daily Moving Average. But with the negative RSI sentiment FTSE 100 could drop further Next support at around 7,451, where the 200 MA will provide some support and the strong support at around 7,300. To reverse this bearish picture a close back above 7,850 is a minimum requirement
UK 100 cfd levels. Testing 0.382 retracement at 7,533. Support at around 7,293
FTSE 250 Mid Cap is continuing to unfold its Shoulder-Head-Shoulder pattern potential down to around 18,500. Negative RSI sentiment supports a move to that support. To demolish this picture a close back above the Neckline at around 19,574 is needed.
2024: The wasted year
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.
Markets are driven by election optimism, overshadowing growing debt and liquidity concerns. The 2024 elections loom large, but economic fundamentals and debt issues warrant cautious investment.
As US economic slowdown hints at a shift away from exceptionalism, USD faces downside with looming Fed cuts. AUD and NZD set to outperform as their rate cuts lag. JPY gains on carry unwind bets and BOJ pivot.
Amid AI and obesity drug excitement, equities see varied prospects: neutral on overvalued US stocks, negative on Japan due to JPY risks, positive on Europe. European defence stocks gain appeal.
With the economic slowdown, quality assets will gain favour, especially sovereign bonds up to 5 years. Central banks' potential rate cuts in Q2 suggest extending duration, despite policy and inflation concerns.
Commodities poised for rebound. The "Year of the Metal" boosts gold and silver, copper awaits rate cuts. Grains may recover, natural gas stabilises. Gold targets $2,300-$2,500/oz, copper's breakout could signal growth.