Technical Analyst, Saxo Bank
DAX is still in a falling trend. There is no divergence on RSI indicating we could see lower levels. Very short term however, we could see the current rebound to be extended to strong resistance at 13,564 if a daily close above 13,020.
Weekly chart DAX is bouncing from around the March trough at around 12,438. There is divergence on RSI indicating the bounce has a bit more leg to run. However, trend is still down Resistance and gap at 13,565 is strong . If selling pressure resumes and RSI breaks below its lower rising trend line the 12,438 support is likely to come under pressure. If taken out we are likely to see DAX testing strong support at 11,556.
GER40 first indication this rebound has more legs to run is if the GER40 cfd/DAX future breaks above is short term falling trend line i.e. a break above 13,020. If that scenario plays out we could see the resistance at 13,675 to be tested.
However, the trend is still down and there is no divergence on RSI indicating another push at the support at around 12,430.
Euro Stoxx 50 trend is down and will remain so until it the Index closes above 3,596. However, Euro Stoxx could be range bound between 3,357 and 3,582 for the next few days.
RSI showing divergence indicating a rebound from lows and if the Index moves above 3,511 the resistance at 3,582 is likely to be tested.
If we see a close above 3,596 the medium term falling trend line (Black declining line) could be tested.
On the weekly chart we can see there seems to be strong support around 3,360. RSI showing divergence indicating higher levels but look out for a possibly break below the lower rising trend line on RSI. If it breaks below it is an indication of the support is to be taken out and lower levels in Euro Stoxx 50. A close above 3,596 the falling trendline is likely to be tested.
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.