Two trades to watch: DAX, AUD/USD

Market chart
Fiona Cincotta
By :  ,  Market Analyst

DAX slips as Ukraine conflict continues

The DAX closed -0.7% lower on Monday at 14460, although managed to pick itself up from session lows of 14100.

Today the index is heading lower again, extending yesterday’s losses but in a calmer fashion. The mood is the market, is less panicked as Western sanctions take effect.

Fighting continues in Ukraine, and peace talks have so far failed to bring about a positive outcome, although talks continue. Whilst Asia saw some gains overnight, Germany has a lot to lose from this conflict should energy prices keep rising.

There is lots of data today. The key release in the European session will be German inflation which is expected to tick higher to 5.1% in February after falling back to 4.9% in January.

Where next for DAX?

The DAX  is extending its recovery from 14000 yesterday’s low, clawing back ground towards the 50 sma.

The RSI is attempting to head into positive territory and points higher keeping buyers optimistic. A move over 14650, the 50 sma and February 27 high could bring 14825 into focus. A move above here exposes the 100 sma and 15000 round number.

Should the price fail to find acceptance at these higher levels and the price could fall lower. A break below 14350 the February 24 high could see 14000 come into play and 13800 last week’s low.


DAX chart

AUD/USD rises post RBA, US ISM manufacturing due

The Australian dollar is pushing higher, extending gains from the previous session. The RBA voted to keep interest rates on hold at 0.1%.

The RBA warned over the impact of rising energy prices from the Ukraine conflict, preferring to see how the situation plays out.

Economists moved forwards rate hike expectations, with a 0.15% lift off expected in Q3.

Stronger than forecast Chinese PMI data is also helping to buoy the aussie. Chinese manufacturing PMI came in at 50.2, above the 49.9 forecast.

Looking ahead US ISM manufacturing data is due later and is expected to rise to 58, up from 57.6.

President Biden’s State of the Union address will be in focus and could shed some light on how the US  intends to move forward with the Ukraine conflict.

Where next for AUD/USD?

AUD/USD is extending its rebound from 0.6970. The price has broken above the 50 sma and the 100sma and the RSI is supportive of further gains.

Buyers are looking for a move sabove 0.73 to target 0.7315 the 2022 high and 0.7375 the 15 November high.

On the downside support can be seen at 0.7242 the 100 sma ahead of 0.7190 the 50 sma. It would take a move below 0.7095 for sellers to gain traction. 

AUDUSD chart

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