Technical Analyst, Saxo Bank
DAX closed yesterday well above the key resistance at around 18,192 and the 0.618 retracement at 18,208.
Strength indicator RSI closed back above 60 threshold indicating DAX is quite likely to move higher in coming weeks.
A bullish move to the 1.382 projection possibly even to the 1.618 projection of the April correction at 18,926 and 19,148 respectively is in the cards.
A daily close below 17,875 is required to demolish the bullish outlook.
EuroStoxx50 is currently testing key resistance at around 5,035 and the 0.618 retracement. A daily close above the index has broken its range trading behaviour and is building an uptrend.
If RSI, already in positive sentiment, is closing back above 60 threshold the bullish trend is further confirmed. That would give upside potential short-term to around 5,200.
The two vertical arrows are indicating the range bound area being shifted higher, which is quite close to the 1.382 projection of the April correction.
A daily close below 4,888 will reverse the bullish trend.
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.