Technical Analyst, Saxo Bank
As described in last Technical Update GER40 cfd and DAX were likely to dip below 13K . It did just that, and them some ie. a bit lower than expected. Down to 0.764 Fibonacci retracement of the Bull market since November 2020. It was also the 2.764 Projection of the Double/triple top like formation formed in 2021.
The bounce seems strong but it could soon face some resistance. We are back above 13K. Yesterday the GER40 cfd/future formed a Bullish Engulfing candle indicating bottom and reversal. However, trend is still down, RSI below 40 and no divergence on RSI and MACD, selling pressure could resume. Resistance at around 13,741 but rebound could continue to 13,900 i.e. 0.382 Fibo retracement of entire bear move since January peak.
However, if market is to be hit by good news rebound could extend to around 14.500. That could potentially be the 4th corrective move before a potential 5th move down.
Looking at the DAX (cash) Index it gapped back up this morning after forming two exhausting like candle previous two days. The Index could bounce back to the Consolidation Area around 14K. However, if sellers take back control and close the gap between today’s and yesterday’s candle bodies (two horizontal dashed lines) we could see a push to test lows from last week at 12,438 and likely new lows.
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist