EZ stocks head lower and US manufacturing data due later
DAX => The index falls to 13900
AUD/USD => The aussie falls to 0.7050
USD/JPY => The pair rises above 130.00
DAX looks to German retail sales
The DAX fell 0.3% across last week as fear of stagflation rose, marking the fourth straight week of losses.
Data last week revealed that inflation in Europe’s largest economy remained at a record high in April, meanwhile, GDP was weak as rising energy prices and supply chain disruptions hurt economic growth.
Today the index is falling at the start of the week as the EU continues to weigh up a Russia oil ban and attention turns towards German retail sales data and manufacturing PMI, the final reading for April. Investors will be looking to see whether rising prices are impacting consumer habits.
|Ger. GDP Q1 QoQ
Ger. retail sales
|Actual: 0.2% (5%)
Expected: 0.3% (0)
Where next for the DAX price?
The DAX rebounded off 13530 but struggled to meaningful push past the 50 sma at 14100.
The price trades below the 50, 100 sma and falling trendline. The 50 sma crossed below the 100 in a bearish signal. However, the RSI is in the consolidation zone.
Sellers would look for a move below 13900 to open the doo to 13500 and a lower low. The buyer will look for a move over the 50 sma at 14100 and 14200 Friday’s high to expose the 100 sma at 14450 and 14600 the April 21 high.
AUD/USD falls as Chinese PMI crashes
AUD/USD fell 2.4% across last week in its worst weekly performance since mid-January as risk sentiment took a hit and fears of a more hawkish Federal Reserve lifted the greenback to a 5-year high.
The pair is falling as trading kicks off for the new week after China’s manufacturing PMIs fell more than expected raising concerns over the economic health of the world’s second-largest economy. Data from Australia was also disappointing with the jobs market showing signs of weakness.
USD looks to ISM manufacturing data ahead of FOMC
USD/JPY rose just 0.04% last week, which marked the month straight week of gains for the greenback versus the yen.
Central bank divergence keeps the pair elevated at 20 year high. Last week the BoJ stuck to its dovish tone pledging unlimited bond purchases every business day, in stark contrast to the Federal Reserve which is expected to raise interest rates by 50 basis points in the FOMC meeting this week.
Ahead of Wednesday’s interest rate announcement, today’s attention will be on ISM ma manufacturing PMIQ which is expected to rise.
|US PCE YoY March
US ISM Manufacturing
|Actual: 6.6% (0.3%)
Support can be found at 128.40 (28 April) and 127.00 (last week’s low).
Resistance for the stock can be seen at 131.25 (2022 high) and 132.00 (round number).