Technical Analyst, Saxo Bank
EuroStoxx 50 is testing key strong support at around 4,888. A daily close below this level is likely to lead to a sell-off down to the gap and strong support area between 4,812 and 4,775.
The strength indicator RSI is still showing positive sentiment, but divergence has been indicating trend exhaustion for several weeks now.
A daily close on the RSI below 40 will confirm the bearish for Eurostoxx50.
A daily close above the key resistance at 5,035 is needed for the index to resume its bullish trend
DAX was rejected for the fourth time at the strong resistance at 18,192 and could slide lower to test key strong support around 17,620.
However, the strength indicator RSI is still showing positive sentiment with no divergence, indicating higher DAX levels are in the cards. But a daily close above 18,192 is needed for that bullish sceanrio to play out
A daily close below 17,620 is likely to push DAX lower to support and gap area between 17,326 and 17,118.
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.