FTSE 100, DAX 40 and Dow remain bid ahead of US inflation data
Outlook on FTSE 100, DAX 40 and Dow ahead of Thursday’s inflation data.
FTSE 100 awaits Thursday’s US inflation data close to 4 ½ year high
The FTSE 100 briefly made a 4 ½ year high on Monday and reached 7,732 before coming off for the remainder of the day amid hawkish US Federal Reserve (Fed) comments.
It then recovered again on Tuesday but so far hasn’t managed to retest its Monday peak as market players await Thursday’s US inflation data.
Were the July 2019 high and Monday’s high at 7,730 to 7,732 to be overcome on a daily chart closing basis, the January and August 2018 highs at 7,791 to 7,796 would be next in line. Further up sits the May 2018 all-time high at 7,903.
Support above Tuesday’s intraday low at 7,668 lies at the 7,649 to 7,621 early and late May 2022 highs and also at the 7,618 to 7,617 November and December 2022 highs.
DAX 40 rally probes major long-term resistance area
The DAX 40’s strong early January rally has reached its long-term major resistance zone which sits at 14,814 to 15,059 and consists of the May 2021 to January 2022 lows, as Fed Chair Jeremy Powell’s speech on Tuesday didn’t provide any fresh insight to the central bank’s monetary stance.
This key resistance area is expected to cap at least in the short-term ahead of Thursday’s US consumer price inflation (CPI) data which is expected to come in at -0.1% month-on-month and 6.5% year-on-year versus 0.1% and 7.1% in the previous month.
Potential slips in the DAX 40 may find support at the 14,712 June 2022 high with further support sitting between the 14,677 mid-December peak and the 14,606 early December high.
Were a rise to above Wednesday’s 14,880 intraday high to be seen, the March 2022 high at 14,927 would be eyed next.
Dow Jones Industrial Average remains bid ahead of US inflation release
The Dow Jones Industrial Average (Dow) bounced off its 55-day simple moving average (SMA) at 33,390 on Tuesday and is gunning for its current January high at 33,937 ahead of Thursday’s US CPI data release.
Having traded sideways for much of December and into early January, the index has now broken out of its range and did so to the upside with the mid-November high at 34,010 being in focus.
Support now sits between the early January high, 55-day SMA and Tuesday’s low at 33,492 to 33,343. While it underpins, further upside is likely to be seen.
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