FTSE 100, DAX 40 and Dow await US Fed decision
Outlook on FTSE 100, DAX 40 and Dow ahead of plethora of central bank meetings by the likes of the Fed, ECB and BoE.
FTSE 100 bounces off support ahead of Thursday’s Bank of England rate meeting
At month end on Tuesday the FTSE 100 bounced off its key 7,725 to 7,708 support area which has held since mid-January while traders await Thursday’s Bank of England (BoE) committee meeting where a 50-basis point rate hike is expected to be announced.
Minor resistance at Tuesday’s 7,795 high is now in focus, together with last week’s high at 7,811. If overcome, the January peak at 7,876 may be back in the picture, a rise above which would bring the May 2018 all-time high at 7,903 and the psychological 8,000 mark to the fore.
Only a drop through this week’s low at 7,708 would put the 10 January low at 7,668 back on the map. As long as this level holds, together with the October-to-January uptrend line at 7,670, the FTSE 100 remains in a medium-term uptrend.
DAX 40 stays sidelined ahead of Thursday’s European Central Bank meeting
The DAX 40 once more revisited its January support zone and slid to 14,993 on Tuesday on a plethora of mixed European consumer spending, CPI, unemployment and retail sales data before being rescued by eurozone GDP data which beat estimates and US markets which rallied on better-than-expected earnings by the likes of McDonald’s.
Attention is now on G7 central banks such as the US Federal Reserve (Fed) which is expected to hike its rates by 25 basis points on Wednesday and the European Central Bank (ECB) and Bank of England (BoE) which are to raise their rates by 50 basis points on Thursday.
Good support remains to be seen between the recent January lows at 14,992 to 14,904 and as long as it underpins, the recent neutral to bullish bias should remain in play.
If the 14,904 low were to be slipped through, however, the May and October 2021 as well as the January 2022 lows at 14,839 to 14,814 could be eyed instead.
On the flipside a rise above last Thursday’s 15,221 high is needed to put the current January high at 15,272 back on the map.
Dow Jones Industrial Average recovers from this week’s low on better-than-expected earnings
The Dow Jones Industrial Average (Dow) was dragged down to 33,512 on Tuesday before rallying on better-than-expected earnings by the likes of AMD, Exxon Mobil and General Motors.
The index is thus once more approaching its December-to-January downtrend line at 34,090 and its 34,168 high seen last week. If overcome, the January high at 34,346 would be targeted.
Support can be seen along the 55-day simple moving average (SMA) at 33,659 and at Tuesday’s 33,512 low. Below it good support can be spotted between the late December and early January highs at 33,492 to 33,461.
While the 10 January low at 33,343 underpins, the medium-term uptrend remains intact.
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