DAX Bearish Setup Builds While Gold Shines on Geopolitical Fear

APAC Markets

• APAC stocks traded mixed/lower, failing to follow Wall Street's gains.
• Geopolitical tensions, especially from Trump’s Tehran evacuation post, kept risk appetite subdued.
• ASX 200 traded narrowly; gold miners helped cushion losses.
• Nikkei 225 held up thanks to a softer JPY; modest BoJ tapering reaction.
• Hang Seng and Shanghai Comp drifted lower amid geopolitical caution.
• US equity futures initially dipped post-Trump tweet, later stabilized after US clarified it wouldn't join Israel’s offensive.

US Market Overview

• Equities:
• Major indices ended higher: SPX +0.95%, NDX +1.42%, DJI +0.75%, RUT +1.15%.
• Most sectors green; Energy, Health Care, Utilities underperformed due to oil weakness.
• Nasdaq outperformed, risk-on tone despite Middle East tensions.
• Iran's de-escalation hints pressured crude lower, lifting stocks intraday.
• Fixed Income:
• 10yr UST futures saw haven flows from geopolitics.
• US sold $13B of 20-yr bonds: High Yield 4.942%, B/C ratio 2.68x.
• Currencies:
• DXY stayed in tight range despite geopolitical updates.
• EUR/USD and GBP/USD uneventful; GBP slightly choppy after UK-US trade deal formalization.
• USD/JPY volatile; rose on early geopolitical risk, fell post-BoJ taper dissent.
• Commodities:
• Crude oil jumped on Trump’s Tehran post and reports of explosions; gains trimmed after US de-escalation stance.
• Gold rallied on haven flows, then fell after tensions cooled.
• Copper slipped amid Chinese market weakness and geopolitical caution.
• Crypto:
• Bitcoin saw modest gains, briefly topped $107,500.

BoJ Decision

• Rate maintained at 0.5% via unanimous vote.
• Bond taper plan starts April 2026: reduce monthly JGB purchases by JPY 200B per quarter.
• Board member Tamura dissented; advocated for a more aggressive taper (JPY 400B/quarter).
• BoJ expects holdings to drop 16-17% by March 2027 vs. June 2024.
• Economic view: moderate recovery, high uncertainty due to trade policy and global developments.
• Inflation expectations rising moderately; FX/economic policy effects remain uncertain.

Geopolitical Highlights

• Trump’s Tehran Evacuation Tweet caused initial panic; sentiment improved after US said it won’t join Israel offensively.
• Reports of multiple explosions across Tehran, Ahvaz, and Strait of Hormuz area.
• Iran:
• Vows continued strikes on Israel until it halts operations.
• Intercepts drones, activates air defences; reports of missile activity and explosions.
• Israel:
• Foreign Minister and PM Netanyahu emphasize unfinished operations and deterrence.
• Diplomacy:
• Trump proposes renewed nuclear talks and ceasefire; Oman and Qatar mediating.
• Macron confirms US offer to meet Iranians, with EU open to negotiations post-ceasefire.
• Military:
• US sending additional aircraft carriers, warships to the region.
• Defense Secretary: deployments are defensive; Trump still aims for a nuclear deal.
• Allies:
• Trump administration told Middle East allies US won’t join war unless Americans targeted.
• US Central Command supports joining strikes; others in administration resist.
• “Last chance” tone from some US sources warning of direct involvement if situation worsens.

US Trade and Tariff Developments

• US-UK:
• Trump signed trade deal with UK; UK protected due to “favoritism”.
• UK steel tariff remains at 25%; 10% tariff for certain vehicle imports.
• Commitments to tariff-free aerospace trade and future quotas for autos.
• US-EU:
• Trump met von der Leyen; instructed teams to accelerate trade talks.
• US-Canada:
• Trump and PM Carney agree to develop new economic/security pact within 30 days.
• US-Japan:
• No tariff agreement reached, but continued talks planned.
• Japan’s Finance Minister: no fixed schedule for more discussions.
• China:
• TikTok not currently a priority in Trump-Xi talks; AI chip export bans emerging as major issue.

Europe/UK Notes

• ECB’s Lagarde: Europe faces structural growth challenges.
• EU declined economic meeting with China ahead of next month’s summit.
• UK Chancellor considering inheritance tax reforms for non-doms.

DAX 4 Hour Technical Analysis

The Germany 40 (DAX) CFD – 4H chart shows that the index is in a corrective pullback phase, currently trading at 23,444.0 (+0.07%). After peaking near 24,490, price has been making a series of lower highs and lower lows, now sitting just below the 200 EMA and middle Bollinger Band — a key confluence zone.

🔍 Technical Overview:

• Bollinger Bands:
• Price has moved toward the lower Bollinger Band, indicating selling pressure is intensifying.
• Bands are widening slightly, suggesting volatility is returning as the pullback progresses.
• EMA Alignment:
• The 20 EMA (23,544.6) and 50 EMA are now acting as resistance, with price trading below both the 20, 50, and 100 EMAs.
• Only the 200 EMA (23,613.4) remains relatively close and is being tested — a break below may open further downside.

📊 Momentum Indicators:

• RSI (14): At 39.18, now in bearish territory, confirming downside momentum is increasing.
• Stochastic RSI: Attempting a bearish crossover in mid-range (57.53 / 60.90), supporting continued weakness in the short term.

📌 Key Levels:

Resistance:

• 🔵 23,600–23,800: EMA cluster and mid-band resistance
• 🔵 24,000–24,200: Upper consolidation barrier
• 🔺 24,490: Major high from recent range

Support:

• 🔴 23,200–23,100: Recent local lows; immediate support
• 🔻 Below that: 22,800 and potentially 22,400 become downside targets

 

⚠️ Outlook:

The DAX is currently in a short-term bearish retracement phase after failing to break out above 24,490. A recovery above 23,600–23,800 would be required to rebuild bullish structure. For now, as long as price remains below the EMAs and middle Bollinger Band, the bias leans bearish.

📉 Bias: Bearish (short term) – watch for a potential retest of 23,200 or further selling if momentum continues lower.

 

Data & Central Banks Ahead

• Key upcoming events: German ZEW, US Retail Sales, BoJ press conference, BoC minutes, G7 summit.
• PBoC injected CNY 197.3B via 7-day reverse repos; strongest CNY fix since March 19.
• New Zealand May Food Price Index rose 0.5% (prior 0.8%).