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DAX holds steady as Russia cuts gas supply to Poland, Bulgaria

The DAX is pointing to a flat start after losses yesterday and underperforming its major European peers.

Overnight, Putin briefly cut the gas supply to Poland and Bulgaria amid escalating tensions surrounding Putin’s demand for payment in rubles. While gas supply has reportedly returned, the move has made investors nervous and could accelerate Europe’s move away from Russian gas dependence. The threat of a cut-off in gas supplies has been looming for weeks, with neither Russia nor Europe willing to act and shoot themselves in the foot.

Attention will now turn to other major European countries for their reactions. Germany, which is particularly dependent on Russian oil, had said that a total embargo on Russian oil is manageable.

German consumer confidence dropped to -26.5, a historic low heading into May, as the Ukraine war led to soaring costs for households. Consumer spending habits are expected to be hit, darkening the economic outlook.

Where next for the DAX?

The DAX trades below its 50 & 100 sma and its multi-month descending trendline. The price fell heavily yesterday and is attempting to move higher today.

However, the long upper wick on the candle suggests the price failed to find much support at the higher price, which, combined with the bearish MACD, keeps sellers optimistic about the further downside.

Sellers will look for a move below 13530, yesterday’s low, ahead of 13300, the March 11 low before 12500 the 2022 low moves back into focus.

On the upside, a move over 13900 exposes the 50 sma at 14200, with a move above this level creating a higher high and opening the door to 14600, the April 21 high.

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Gold trades under pressure

After falling over 2% last week, Gold is extending the slide this week, trading down a further 1.3%.

The precious metal is being hammered by the stronger USD, which is consolidating near a two-year high.

The US Dollar is being boosted by a combination of safe-haven flows amid rising fears over the prospects for global growth and the prospect of the Fed hiking interest rates at a faster pace.

The combination of a dollar safe-haven trade and rising interest rate expectations means a double whammy hit for the precious metal, which is USD denominated and non-yielding.

Looking ahead, the release of mid-tier US data is unlikely to have a big impact on gold. Instead, Russia’s gas blackmail developments are likely to be in focus.

Where next for the Gold price?

Gold failed to capitalize on its move over 1900, which, along with the bearish MACD, supports the sellers; however, it will take a move below 1890 for bears to gain momentum, exposing the 100 sma at 1876. A break below here could open the door to 1850, the late January high.

On the upside, buyers could look for a move over 1911, the overnight swing high ahead of 1918 support from early April and exposing the 50 sma at 1938.

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