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DAX’s Surge, Bullish Fatigue, and the Road to 17,000

The DAX30 has experienced a noteworthy nearly 14% surge from its October low, but signs of bullish fatigue are emerging as traders eagerly await the release of today's US unemployment data.

What factors do you believe will play a crucial role in influencing the DAX's movements as it approaches the psychologically significant 17,000 level?

Read below what our desk thinks, and the important levels to watch this week.

This market brief is an overview of the week ahead and some of the events we see as being important to the markets.

Please be aware that our views may change throughout the course of the week, and we do not publish updates of such changes. For up-to-the-minute market analysis see our live trading room.

INDICES

AUSTRALASIA

ASX – 7216 (+161 or +2.28%)

The ASX is trading in the middle of a multi year range. What will be the catalyst to move out of this area?

VOLATILITY ALERTS:

Mon 10:30 – AUD Consumer Confidence

Thur 11:30 – AUD Unemployment Rate

For a move higher, we would like to see the ASX close above 7215. Should this occur, a move above 7247 should be expected, and if momentum is strong, we cannot rule out moves to 7269 and 7389.
Failure to close above 7215 means a potential move into 7112. 7093 is the next support level down if 6991 doesn’t hold. If downside momentum is really strong then we could see another leg down into 6854.

EUROPE

DAX (30) – 16815 (+783 or +4.88%)

The DAX has closed at all time high levels. Will the momentum continue?

VOLATILITY ALERTS:

Fri 00:15 – EUR Interest Rate Decision

For the DAX to move higher, we would like to see it close above 16800. Should this occur, then 16900 is the next level ahead. If upside momentum is strong, then 17000 and 17200 cannot be ruled out. 

To the downside, should we not see it hold above 16800, we will look for a move into support at 16691. A strong break and close below this handle and 16541 is the next level down. If downside pressure mounts, then 16427 cannot be ruled out.

US

S&P 500 – 4616 (+52 or +1.14%)

The SPX500 has continued its up trend closing above recent highs.

VOLATILITY ALERTS:

Wed 00:30 – USD Inflation Rate

Wed 00:30 – USD CPI

Thur 06:00 – USD FED Interest Rate Decision

Fri 00:30 – USD Retail Sales

Fri 00:30 – USD Jobless Claims

For a move higher, we would like to see the S&P hold above 4600. Should this occur, we will look for a move through 4657. And if momentum is strong, we cannot rule out moves to 4700 and 4819.

If we cannot hold above 4600, we could see this market move down into 4518 A break of this level, however, may result in a quick move down to 4480. And if momentum to the downside remains strong, we may see a fast move back down to 4412.

FOREX

AUD/USD – 0.6578 (-3 or -0.05%)

AUDUSD is finding resistance coming into a busy news release week.

VOLATILITY ALERTS:

Mon 10:30 – AUD Consumer Confidence

Thur 11:30 – AUD Unemployment Rate

Wed 00:30 – USD Inflation Rate

Wed 00:30 – USD CPI

Thur 06:00 – USD FED Interest Rate Decision

Fri 00:30 – USD Retail Sales

Fri 00:30 – USD Jobless Claims

For a move higher this week, we would like to see it hold above 0.6578. We will then be targeting a move through 0.6594. If we see a strong break and close above this level, then we can’t rule out a move to 0.6639. Should momentum to the upside be really strong, then 0.6676 could be targeted.
If this market cannot hold above 0.6581 we could see a move down to 0.6550. A strong break of this level may result in a move into 0.6485 however, any weakness below this level could see a sharp drop into 0.6457.

EUR/USD – 1.0764 (-180 or -1.64%)

The EURUSD is following the current USDollar weakness. Will a reversal happen?

VOLATILITY ALERTS:

Fri 00:15 – EUR Interest Rate Decision

Wed 00:30 – USD Inflation Rate

Wed 00:30 – USD CPI

Thur 06:00 – USD FED Interest Rate Decision

Fri 00:30 – USD Retail Sales

Fri 00:30 – USD Jobless Claims

For a move higher, we would like to see the Euro close above 1.0764. Should this occur, we should see a move above 1.0773. A break of this level could see this market rally further to 1.0805 and 1.0866.

If the EURO cannot close above 1.0764, we will see a move into 1.0754. A strong break of this level may result in a move into 1.0697, however, any weakness below this level could see a move into 1.0665.

GBP/USD – 1.2550 (-52 or -0.41%)

GBPUSD has closed lower this week.

VOLATILITY ALERTS:

Thur 23:00 – GBP BOE Interest Rate Decision

Wed 00:30 – USD Inflation Rate

Wed 00:30 – USD CPI

Thur 06:00 – USD FED Interest Rate Decision

Fri 00:30 – USD Retail Sales

Fri 00:30 – USD Jobless Claims

For a move to the upside, we would like to see Cable hold above 1.2550 before a break higher into 1.2579. If this market can see a strong close above this level, we may then see a strong pushback into 1.2659. If upside momentum is really strong, then a move back into 1.2724 can’t be ruled out.

Should we fail to hold above 1.2550, we will look for a move down to 1.2485. A break below this level, however, could see Cable further depreciate to 1.2433 by the week’s end. And if momentum is very weak, we cannot rule out a move to 1.2346.

USD/JPY – 144.94 (-459 or -3.07%)

After hitting the yearly highs, the USDJPY has seen a sharp decline. Will the bulls find support?

VOLATILITY ALERTS:

Wed 00:30 – USD Inflation Rate

Wed 00:30 – USD CPI

Thur 06:00 – USD FED Interest Rate Decision

Fri 00:30 – USD Retail Sales

Fri 00:30 – USD Jobless Claims

For a move to the upside, we must now see this market close above 144.94. Should this occur, we will look for a move into 146.09, and if the upside momentum is strong, we could see a move higher into 147.59 and potentially 148.92.

If we cannot close above 144.94, we could see a move back to test 143.95 before a pause to the downside. A break below this level may result in a sharp move lower into 142.98, and any further breaks to the downside may see a bigger move into 141.95.

COMMODITIES

GOLD – 2007 (+6 or +0.3%)

Gold has broken to the highest levels since 2020, will the trend continue?

For a move higher, we need to see this market close above 2000. Should this occur we could see a move into 2032; and any break of this level could see a stronger move into 2066. If momentum is strong, then 2079 cannot be ruled out.

If Gold cannot close above 2000, we can see a move down to 1988 A break below this level could see a move lower into 1944 and if momentum is very strong to the downside, we could see a move to 1900.

CRYPTOS

BITCOIN – 43793 (+6391 or +17.09%)

Will the momentum and excitement of Bitcoin continue higher?

For a move higher, we must now see this market close above 43000. Should this occur, we could see a move into 46000 before retesting 47000. If the upside momentum is really strong, then we can’t rule out 49000.

Failure to close above 42000 could see a move into 40000. If selling pressure takes control, then we could see a move down to 35000. A close below this level and 30000 can’t be ruled out.

DISCLAIMER

The views represented on this website do not contain (and should not be construed as containing) financial advice, recommendations, opinions in relation to acquiring, hold or disposing of a financial product of any kind, or a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Trade View accepts no responsibility for any use that may be made of these comments for any consequences that result. No representation or warranty is given as to the accuracy or completeness of the above information. Consequently any person acting on it does so entirely at his or her own risk. The research does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication.