FTSE 100, DAX 40 and S&P 500 begin Monday on a weaker footing
Outlook on FTSE 100, DAX 40 and S&P 500 ahead of plethora of central bank meetings by the likes of the Fed, ECB and BoE.
FTSE 100 sells off ahead of Thursday’s Bank of England rate meeting
The FTSE 100 continues to slide ahead of this week’s Bank of England (BoE) committee meeting where a 50-basis point rate hike is expected to be announced.
Nonetheless the index is to end the month of January in positive territory.
A fall through last week’s low at 7,711 would push the 10 January low at 7,668 to the fore. As long as this level holds, together with the October-to-January uptrend line at 7,644, 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 representing possible upside targets.
Immediate resistance can be spotted at Thursday’s 7,786 high. While remaining below it, immediate downside pressure should be maintained.
DAX 40 gives back recent gains ahead of Thursday’s European Central Bank meeting
The DAX 40 is seen giving back some of last week’s gains as investors are refocusing their attention on monetary policy with the US Federal Reserve (Fed) expected to hike its rates by 25-basis points on Wednesday and the European Central Bank (ECB) and Bank of England (BoE) by 50-basis points on Thursday.
Good support seen between the recent January lows at 14,964 to 14,904 are thus back in the frame but may once more offer support this week. As long as the latter level underpins, a neutral to bullish bias remains intact.
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.
A rise above Thursday’s 15,221 high is needed to put the current January high at 15,272 back on the map.
S&P 500 expected to open lower
The S&P 500 is expected to begin this week on a weaker footing, having last week jumped by close to 2.5% amid slowing inflation, weakening economic data and mixed corporate earnings in the US which point towards a slower pace of central bank policy tightening with the Fed expected to raise rates by 25-basis points on Wednesday.
The minor psychological 4,000 mark is thus back in play, below which the January support line can be found at 3,955 as well as the 55- and 200-day simple moving averages (SMAs) at 3,946 to 3,941.
Resistance is seen at last week’s high at 4,062, a rise above which would push the early January high at 4,101 and the December peak at 4,139 back to the fore.
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