FTSE 100, DAX 40 and CAC 40 regain lost ground ahead of US PPI data
Outlook on FTSE 100, DAX 40 and CAC 40 ahead of US PPI data.
FTSE 100 rises on short-covering ahead of weekend
The FTSE 100 is recovering into the end of the week as traders buy back some of their recent shorts ahead of next week’s anticipated 50 basis point rate hike by the Bank of England (BoE) and as inflation in China drops to an 8-month low.
The FTSE 100 is thus bouncing off Thursday’s low at 7,463, made not far above the 7,429 to 7,421 mid-November high and late November low, and is seen heading back towards its 7,515 mid-September peak.
Further up lies its near six-month high at 7,618 which is part of the major 7,621 to 7,671 April-to-June highs resistance zone.
While the late November low at 7,421 underpins, the medium-term October-to-December uptrend remains valid.
DAX 40 likely to recover at end of first negative week in ten
The DAX 40 is expected to bounce back into the end of the week but will probably still end up in negative territory after nine consecutive positive weeks once US Producer Price Inflation (PPI) has been published on Friday.
Immediate minor resistance may be encountered at the 14,365 early December low but more significant resistance at the 14,442 mid-November high. Above it lurks its near six-month high at 14,606.
Only a slip through Thursday’s low at 14,192 would put the mid-November lows at 14,150 to 14,125 back on the map.
The CAC 40 regains some lost ground ahead of next week’s ECB rate announcement
The French CAC 40 index’s retracement lower to marginally below its 6,641 late November low might be followed by a short-covering advance on Friday, ahead of next week’s European Central Bank’s (ECB) rate hike which is widely anticipated to add 50 basis points to the cash rate, taking it to 2.5%.
On Friday minor resistance can be spotted at the 6,686 mid-November high and then at the 24 November high at 6,730 while support below Thursday’s low at 6,628 sits at the 6,522 mid-November trough.
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