**Technical Analysis of the DAX 40, AUD/USD, and Copper: A Detailed Review Amid Hawkish Fed Stance**
*Adapted and expanded from Ahmed Mamdouh, MENAFN*
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The financial markets have been navigating a landscape shaped by persistent inflationary pressures and the resulting shift in central bank policy stances. The recent hawkish signals from the US Federal Reserve have intensified volatility, sending shockwaves through major equity indices, currencies, and commodities. This article presents a comprehensive technical analysis of the DAX 40, AUD/USD, and copper, exploring their recent price action in the wake of Fed pronouncements and placing these moves in a broader macroeconomic context.
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## Fed Comments and Their Broader Impact
On the heels of the latest Federal Reserve policy meeting, Chair Jerome Powell delivered statements interpreted as supportive of continued monetary tightening. The Fed reiterated its commitment to bringing inflation down to its 2 percent target, suggesting that interest rates may need to stay elevated for longer than previously anticipated.
**Implications for Markets:**
– **Equities:** Higher rates often translate to higher borrowing costs for corporations and lower present values for future corporate earnings. This creates downward pressure on stock indices such as the DAX 40.
– **Currency Markets:** Hawkish Fed rhetoric tends to strengthen the US dollar as yields on Treasury securities rise, drawing global capital flows toward dollar-denominated assets.
– **Commodities:** As the dollar strengthens, commodities, which are typically priced in the US currency, become more expensive for non-dollar holders, leading to downward pressure on prices.
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## DAX 40: Technical Overview Amid Rising Yields
The DAX 40, Germany’s prime stock index, found itself under pressure following the Fed’s statements, as investor sentiment soured on risk assets.
### Price Action and Chart Analysis
– **Recent Trends:** The DAX has been on a gradual downtrend since mid-year highs, struggling below the psychological 16,000-mark. After the Fed’s comments, the index experienced a pronounced dip, moving well below key moving averages.
– **Support and Resistance:**
– **Immediate Support:** Around 15,700 points, which represents a confluence of previous swing lows and a short-term Fibonacci retracement level.
– **Critical Support:** The 15,400-15,500 region, coinciding with the 200-day simple moving average (SMA). If this level is breached, the index could face accelerated selling.
– **Key Resistance:** 16,000 remains a pivotal psychological barrier; a close above this would suggest renewed bullish momentum.
– **Momentum Indicators:** The Relative Strength Index (RSI) currently hovers in the mid-40s, not yet at oversold territory but pointing to weakening momentum.
### Fundamental Drivers
– **Economic Data:** Germany has been facing stagnating economic growth, reduced industrial output, and persistent inflation pressures, leading to weaker corporate earnings outlooks.
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