DAX => The index rises to 35000
Bitcoin => The cryptocurrency holds above 47K
GBP/USD => The pair struggles at 1.31
DAX edges lower during peace talks, German inflation is in focus
The DAX closed 2.8% higher on Tuesday, boosted by optimism surrounding the latest Russia-Ukraine peace talks.
Russia agreed to pull back military activity from around Kyiv and Chernihiv, although the West is skeptical that Russia could be playing for time. Also, the Kremlin is reportedly on the verge of agreeing on a presidential meeting between Putin and Zelenskyy.
The encouraging update from the talks overshadowed weak German consumer sentiment data. The latest figures from GFK showed that consumer confidence dropped to the worst level in a year.
Today the DAX is edging lower with peace talks still in focus. German inflation data will also be under the spotlight as consumer prices are expected to rise to a record high.
|Ger. GFK consumer confidence
Ger. Inflation March YoY
|Actual: -15.5 (7)
Expected: 6.7% (1.2%)
Where next for the DAX?
The DAX has extended its rebound from 12430, 2022 low reached in early March.
The recapturing of the 50 sma, a close above key resistance at 14800, and the bullish RSI keep buyers hopeful of further upside.
Buyers will look for a move above resistance at 15000, the key psychological level, to expose the 100 sma at 15250 and bring 15750 into play. On the flip side, a break below 14200, last week’s low, opens the door to 13800, the February 24 low.
Bitcoin stays above 47K
This week has seen Bitcoin finally break out of a holding pattern within which it has traded since the start of the year, rising to 48,200, its highest level so far this year.
Bitcoin remains around $20,000 off its all-time high. Several factors could be driving Bitcoin, such as rising risk sentiment, as risker assets across the financial market have risen. Also, with inflation surging ever higher, BTC/USD could be considered a hedge against inflation.
Separately rumors that other countries are considering adopting Bitcoin as a legal tender, like El Salvador, could be also helping the crypto rise.
Finally, proposed changes to Bitcoin’s underlying code to considerably reduce its electricity consumption, boosting its green credentials, could also work in the cryptos favor. However, gaining the industry consensus required to make such a move has historically been extremely difficult.
Today BTC/USD is edging modestly lower but remains well supported above 45,000.
GBP/USD looks to the US private payroll data
GBP/USD rose mildly higher yesterday, boosted by US dollar weakness.
The USD fell across the board on Tuesday while investors sold out of this safe haven in search of riskier assets. Meanwhile, peace talks appeared to make some progress. Investors will keep monitoring peace talks closely, hoping that a cease-fire will be agreed upon sooner than later. Investors will also look toward the US ADP employment report, which is expected to show strong job creation in the private sector.
This report is often considered a lead indicator for Friday’s non-farm payroll report. US Q4 GDP data is also due. However, this is the final revision, so it is not usually market moving.
|US ADP Employment report
|Expected: 450k (7.7)
Support can be found at 1.3050 (weekly low) and 1.30 (2022 low).
Resistance for the pair can be seen at 1.3160 (December low) and 1.325 (March 25 high)
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