GER40

The German DAX index is showing a bullish signal, setting the stage for potential gains on Friday and possibly in early next week ahead once the French elections are out of the way.

We have seen further widening of the bond yield spreads between German and French debt today. Investors are clearly worried about a sustained period of political uncertainty and are therefore seeking haven assets and reducing their risk exposure.

DAX drops to test key technical support area as Wall Street is spooked by latest inflation data, further raising doubts over Fed's ability to cut rates. Earnings from Microsoft and Alphabet to come after the bell.

Earnings have helped to lift the mood so far in today's session, but risk appetite could be limited amid ongoing geopolitical risks and uncertainty over interest rates outlook. DAX technical analysis shows the German index is still residing in a bearish channel, despite the bounce.

The S&P 500 extends losses to third week amid raised geopolitical risks and rising bond yields. Concerns over the escalation of the situation in the Middle East is at the forefront of investors’ minds. The situation remains volatile with Israel seeking revenge for Iran’s retaliatory attacks on Saturday.

DAX technical levels and factors to watch on the German index as it tests the pivotal 18,000 level with the focus turning on the ECB rate decision, while US sticky inflation concerns make unwelcome return ahead of PPI data.

German DAX index makes a sluggish start to Q2 after a sharp 5-month rally amid profit-taking, as correction risks linger. DAX technical analysis suggests more evidence is needed to confirm at least a short-term high has been hit.

What has driven the German index to record highs and can the rally persist? US investors are back, with Nvidia earnings coming into focus this week. DAX technical analysis shows index is testing key support.

After hitting a new all-time high in February, the FTSE has struggled to find any sustainable support, hurt by concerns over China, UK’s struggling economy and high interest rates across the world. But we have had some positive data out of China, the UK and US this week, which may mean the worst days are behind us.

As investors assess the risks of interest rates remaining high for longer, and of course, the escalation of the situation in the Middle East following the bombing of the hospital in Gaza, they are not going to be aggressive in risk-taking you would think.

DAX falls with eyes on the Middle East. Oil holds onto Friday’s gains.

Price action on USD/JPY has remained confined to a range since its volatile selloff from 150, but we note a pivotal area worth keeping an eye on today for potential bullish or bearish setups. And whilst the DAX has bounced since its fall to 15k, bulls seem to lack legs which has us on guard for a potential swing high.

The slight recovery in European indices can be attributed to an oversold technical bounce, meaning we could see the selling pressure resume once again. In fact, there is a risk that things could get worse before stock prices become attractive again in these tough economic times.

Risk off is the key theme in the markets right now and we are seeing stock averages continue to struggle. Despite yesterday’s tech-fuelled rally, US futures have been dragged lower by weaker European and Asian markets. The FTSE 100 fell 1.4%, while the German DAX was off by around 1% at the time of writing by mid-morning EU trade.

European stock markets were able to recoup Tuesday’s sharp losses in the first half of Wednesday’s session, which also helped to fuel a modest recovery in the risk-sensitive EUR/USD pair. Sentiment improved for two reasons, but whether the recovery will hold remains to be seen.

After Monday’s positive close, the “risk off” trade returned Tuesday as European stocks and US futures slid. The Italian stock markets fell more than 2.5% to lead Europe lower. We saw noticeable falls for the Germany DAX and other leading indices in the region. The risk-off tone kept the dollar underpinned, which weighed down on the commodities like copper, gold and oil.

Today we will get technical on the USD/JPY and EUR/USD outlook and provide analysis on the FTSE and DAX outlook.