Daily overview: Indices weaken in absence of Wall Street. DE30 close to an important support area.

  • During Monday’s session, risk aversion was seen on the European stock market. The main stock indexes started the new week down.
  • European and Asian indexes underperformed in the absence of trade on Wall Street due to the national holiday. The DAX lost 0.9%, the CAC40 fell 1% and the FTSE closed the session down 0.7%.
  • On the German stock market, a cascade of sales of Sartorius shares has been registered – the company has adjusted its annual forecast downwards. Airbus gained nearly 1% following the biggest deal in aviation history with India’s largest airline.
  • The JAP225 corrected and was one of the weakest indices today. Chinese indices did not react euphorically to upbeat comments from Xi Jinping, who indicated significant progress in US-China talks after talks with Blinken.
  • The dollar, which had weakened significantly last week, tried to recoup losses today. However, the magnitude of the move is small compared to the recent correction. The US currency outperformed the AUD and NZD.
  • AUD/USD has started an uptrend correction due to the PBOC interest rate decision in China tomorrow. China should decide to ease its monetary policy to support the slowing economic recovery.
  • Goldman Sachs analysts have lowered their economic growth forecast for China to 5.4% from 6%. The forecasts for 2024 have also been revised down from 4.6% to 4.5%. China’s economic growth outlook has also been downgraded by Nomura.
  • The prices of major currency pairs fell only 0.2%, which keeps the price above the $1.09 level, and a resumption of the uptrend movement is not excluded once the correction is over.
  • Industrial metals, which rely heavily on momentum in the Chinese economy, also underperformed. The biggest declines were seen in ZINC, where the market sees risks on the side of rising supply and falling demand.
  • Brent crude and WTI fell slightly, while NATGAS rose 2.7%.
  • Cryptocurrencies traded in mixed sentiment, although Bitcoin responded with a small break above key near-term resistance at $26,600 following news of ETF demand from Bitcoin.
  • Fidelity after BlackRock.

Despite the correction on the German DAX (DE30), the uptrend remains the base case. The key short-term support zone is now located between 16,335 and 16,315 points (1:1 geometry), supported by the EMA100 moving average and previous price reactions. Source: xStation5

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