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DAX rises despite consumer confidence tanking. GBP/USD edges cautiously higher, above 1.31.
DAX rises despite consumer confidence tanking
DAX is rising modestly after booking gains of 0.7% in the previous session. Attention is on Russia, Ukraine peace talks, the first in two weeks, as investors overlook reports that negotiators experience signs of chemical poisoning after negotiations earlier in the month. Ukraine has said that it is willing to accept neutral status.
German consumer confidence plunged to -15.5 in April, owing to surging prices and uncertainty from the fallout of the Ukraine war. This was down from -8.5 in March and below the -12 forecast and was also the worst reading since February 2021.
Where next for DAX?
The DAX has extended its rebound from 12500 at the start of the month and has broken above resistance at 15550, which capped gains last week. The RSI is supportive of further upside.
Buyers need to recapture the 50 sma 14680 to test 14800, a key level that offered support on several occasions across the past six months. A break above here would be significant and would mark the DAX recouping all the losses associated with the Russian invasion.
On the flip side, a fall below 15550 could open the door to support at 14100, a level that limited losses across last week. Below here, 13800 horizontal support could come into play.
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GBP/USD edges cautiously higher, above 1.31
GBPUSD fell 0.8% at the start of the week, falling below 1.31 to a two-week low after BoE’s Andrew Bailey warned about slowing economic growth and the inflation shock.
Today the BoE will release its quarterly bulletin, which will be studied closely as the BoE continues to hike rates.
Today the USD is edging lower on the improved market mood. Attention will now turn to Fed speakers Williams and Bostic and JOLTS job openings, which are expected to show that there are still over 11 million vacancies in the US, over double the number of unemployed, highlighting just how tight the US jobs market is.
Where next for GBP/USD?
GBP/USD rose from the 2022 low of 1.30 before running into resistance at 1.33. From here, the price rebounded lower again, falling below the 50 SMA on the 4-hour chart. The RSI suggests more downside to come while it remains out of the oversold territory.
Sellers will need to break below support at 1.3070 this week’s low to bring 1.30 back into the target. A break below here could open the door to 1.2855, the November 2020 low.
On the flip side, buyers will be looking for a move over the 50 sma at 1.3170 to open the door to 1.3230, last week’s high, before exposing 1.33.
(Click on image to enlarge)
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