DAX rises, despite weak industrial production. Gold rises with inflation concerns in focus.
DAX rises, despite weak industrial production
The DAX along with European bourses are pointing to a stronger start, after a solid finish on Wall Street on Friday (DAX).
Strong US jobs data and impressive earnings from Amazon lifted stocks, although surging wage growth keeps concerns over inflation present.
ECB policy makers, speaking over the weekend, pointed to a Q4 interest rate rise following on from a hawkish Christine Lagarde.
German industrial production unexpectedly fell in December -0.3% MoM, after falling -0.2% in November. Expectations had been for a 0.4% rise.
Eurozone investor confidence is due to show that that the outlook is improving in February, rising to 15.1 from 14.9.
Where next for the DAX?
The DAX ran into resistance at the falling trendline 15750 and rebounded lower. The index fell below its 50 & 100 sma before finding support at 15050 on Friday the January 27 low.
The price is consolidating off this recent low. The RSI is supportive of further downside whilst it remains out of oversold territory.
Sellers could look for a move below 15050 to target 14850 the 2022 low.
Buyers would look for a move over 15340 January 30 low to expose the 50 sma at 15440 and the 100sma at 15570. It would take a move over 15760 for the bias to change to bullish.
Gold rises with inflation concerns in focus
Gold prices are pushing higher, building on 0.9% gains from the previous week, as inflation concerns persist.
Friday’s US NFP was much better than expected with 467k jobs added in January. However, the report revealed wage growth of 5.7%, boosting inflation fears.
Today, the stronger US dollar & firmer equities are limiting gains in the precious metal. However, with US CPI due later in the week investors could continue to fret over rising prices.
Tensions remain high between Russia smf Ukraine amid reports that Russia could invade within days. Geopolitical tensions are supporting the safe haven Gold.
Where next for Gold prices?
Gold is trading within an ascending triangle on the 4-hour chart. The price trades at the upper band of the triangle, and the RSI supports further upside.
Bulls will look for a move over 1815 to expose the 100 sma at 1818 and open the door to 1830 the January 21 low.
Failure to retake 1815 could see sellers push the price lower to the 590 sma at 1805. It’s worth noting that the 50 sma crossed below the 100 sma in a bearish move.
A break below 1805 could open the door to 1793 the February low. A move below here could see the sellers gain traction.
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