FTSE 100, DAX 40 and S&P 500 on back foot as yields surge
Technical levels for the FTSE 100, DAX 40 and S&P 500 within their fundamental context.
FTSE 100 follows Wall Street lower
The FTSE 100 opened lower on Wednesday on the back of US indices which hit six- to seven-week lows amid rapidly rising yields.
This comes after the index rallied to its 55-day simple moving average (SMA) at 7,330 in the previous three sessions before being rejected by it. While it caps, another down leg towards the early September low at 7,131 seems to be on the cards, continuing the August descent.
Slightly below 7,131 the March to September uptrend line can be found at 7,108.
Minor resistance is to be seen around the 7,300 mark which may be revisited before further downside is seen as the UK Halifax month-on-month house price index came in at a better than expected 0.4% versus an expected 0.1% and compared to -0.1% in the previous month.
DAX takes a hit amid worries of a looming recession
The DAX 40 slid to 12,703 in its overnight session, in line with weaker US and Asian equity markets following rapidly rising US yields and disappointing trade data for China.
The index remains within its downtrend channel as investors continue to worry about a looming European recession and await the highly anticipated European Central Bank (ECB) monetary policy decision on Thursday which may see an aggressive 75-basis point rate hike.
Better-than-expected German industrial production, coming in at a month-on-month -0.3% compared to an expected -0.5%, helped the index stabilise.
Support below Wednesday’s overnight session low at 12,703 can be found at the early September lows at 12,602 to 12,596, a slip through which would have medium-term bearish implications.
Resistance is to be seen along the downtrend channel resistance line at 12,858 and also at Tuesday’s 12,931 high.
S&P 500 drops to mid-July lows
The S&P 500 continues to slide within its August to September downtrend channel as US yields surge with a drop through Tuesday’s low at 3,884 opening the way for a slide towards the July trough at 3,720 to be witnessed.
This will remain the case while no rise and daily chart close above Tuesday’s high at 3,961 unfolds.
Minor support on the way down sits at the May low at 3,811. Immediate resistance can be found at the late July 3,911 low.
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