FTSE 100 and Nasdaq 100 remain under pressure while DAX 40 holds up well

FTSE 100 slides further on hawkish Fed Chair comments

Having risen to last week’s high at 7,976, the FTSE 100 has been dragged down by the US Federal Reserve (Fed’s) Chair Jerome Powell’s two-day testimony to Congress in which he stated that the Fed is “prepared to increase the pace of interest rate hikes” if the data required it but that no decision on the March meeting had yet been taken.

The FTSE 100’s slide through its January-to-March uptrend line has led to the index dropping towards its 7,854 to 7,850 key support area which consists of the 10 February and last week’s lows. As long as this significant support zone holds, the medium-term uptrend remains valid.

Were 7,850 to give way on a daily chart closing basis, however, a medium-term top would likely be formed with the late January low at 7,708 then representing the next downside target.

Minor resistance above the breached uptrend line – now because of inverse polarity a resistance line – at 7,922 can be seen along the February-to-March resistance line at 7,950.

DAX 40 consolidates below its 14-month high

On Tuesday, the DAX 40 traded at level last seen in January 2022 before being pushed down by hawkish comments from the Fed Chair Jerome Powell and an unexpected fall in German retail sales early on Wednesday morning.

From Wednesday’s low at 15,490 the index has risen again on the back of German industrial output growth which rose to its strongest in 2 ½ years and despite hawkish comments being made by the European Central Bank (ECB) President Christine Lagarde with the DAX 40 heading back up towards its 15,656 February peak. Above it lurks this week’s high at 15,709.

Support below this week’s low at 15,490 can be spotted at the 15,481 early March high and at last Thursday’s high at 15,390.

Nasdaq 100

Last week’s Nasdaq 100 rally culminated in Monday’s interim top being formed at 12,467 before the index took a hit on hawkish comments by the Fed Chair Jerome Powell by falling to Wednesday’s low at 12,096 before levelling out ahead of Friday’s Non-Farm Payrolls.

A fall through 12,096 could lead to this year’s uptrend line at 11,960 being revisited whereas a rise above Wednesday’s 12,241 high may put Monday’s low at 12,276 back on the map, a rise above which would be bullish and may indicate that the 12,467 high seen earlier this week could be exceeded.