FTSE 100, DAX 40 and Dow post better-than-expected US GDP numbers
Outlook on FTSE 100, DAX 40 and Dow ahead of US PCE price index data, pending home sales, plus earnings from American Express and Chevron.
FTSE 100 stays sidelined ahead of next week’s Bank of England rate meeting
The FTSE 100 continues to range trade in low volatility, having recovered from this week’s 7,711 low, made marginally below last week’s 7,724 low, ahead of next week’s Bank of England (BoE) committee meeting.
While Monday’s high at 7,811 caps, though, a short-term downtrend remains intact. For this to no longer be the case, the current January peak at 7,876 would need to be bettered. While 7,811 caps, there remains a risk of this week’s low at 7,711 being slipped through with the 10 January low at 7,668 then being in focus.
As long as this level holds, the FTSE 100 remains in a medium-term uptrend with the May 2018 all-time high at 7,903 and the psychological 8,000 mark still possibly being reached.
DAX 40 continues to range trade ahead of next week’s ECB meeting
The DAX 40 continues to gradually advance from last week’s 14,904 low and is being supported by its January support line at 15,094, ahead of next week’s European Central Bank (ECB) meeting.
If slipped through on Friday, this week’s low at 14,964, together with last week’s low at 14,904, would be back in the picture. As long as the latter level underpins, an uptrend remains intact.
If not, the May and October 2021 as well as the January 2022 lows at 14,839 to 14,814 could be eyed instead. A rise above Thursday’s 15,221 high would push the current January high at 15,272 to the fore.
Dow Jones Industrial Average rally continues on back of solid US GDP data
The Dow Jones Industrial Average (Dow) continues its advance towards the December-to-January downtrend line at 34,130 on the back of better-than-expected fourth quarter (Q4) US GDP data.
The US economy grew by an annualised 2.9% quarter-on-quarter in Q4 2022 versus an estimate of 2.6% and following a 3.2% jump in Q3.
The Dow remains bid ahead of Friday’s US PCE price index – the US Federal Reserve’s (Fed’s) preferred measure of inflation - and pending home sales, plus earnings from American Express and Chevron.
Were the December-to-January downtrend line at 34,130 to be broken through, the way would be open for the January high at 34,346 to be back in the frame.
Support can be seen along the 55-day simple moving average (SMA) at 33,644. 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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