FTSE 100, DAX 40 and S&P 500 slip on US debt ceiling woes
Outlook on FTSE 100, DAX 40 and S&P 500 amid ongoing US debt ceiling negotiations.
FTSE 100 weighs on uptrend line
The FTSE 100 has been dragged down from this week’s high at 7,806 as fierce ongoing negotiations over the US debt ceiling continue to weigh on US equity markets.
The March-to-May support line at 7,730 is currently being tested with the early and mid-May lows at 7,689 to 7,679 offering potential support. Further down sits the 38.2% Fibonacci retracement of the March advance at 7,657. While this level underpins, the medium-term uptrend from the March low is considered to be intact.
For the bulls to be back in control, however, a rise and daily chart close above Tuesday’s high at 7,806 and also last week’s high at 7,817 needs to be made.
If the latter level were to be exceeded on a daily chart closing basis, the UK blue chip index may resume its ascent towards the 8,000 region.
DAX 40 continues to sideways trade below the psychological 16,000 mark
The DAX 40 remains within its two-month sideways trading range below the minor psychological 16,000 mark ahead of final eurozone inflation figures for April and new car registration data for Germany.
A rise and daily chart close above the early to mid-May highs between 16,005 to 16,009 is needed for the next higher 2021 to 2023 resistance line at 16,168 to be reached.
Meanwhile the March-to-May tentative uptrend line at 15,890 is currently being tested, below which sits last week’s low at 15,756.
While the next lower early May trough at 15,659 underpins, this year’s medium-term uptrend will remain valid.
S&P 500 nears March-to-May uptrend line
With no resolution to the US debt ceiling issue in sight just yet, despite progress being made between President Biden, who has cut short a trip to Asia to continue negotiations, and House speaker McCarthy, the S&P 500 continues to trade in a low volatility sideways range but nears its March-to-May uptrend line at 4,104.
Together with the 10 May low at 4,099 it may act as short-term support. Were the latter level to give way on a daily chart closing basis, however, the early March high, 22 March high and 10 April low as well as late April and early May lows at 4,078 to 4,040 may be reached next but are expected to hold.
For a resumption of the medium-term uptrend to become feasible, a rise and daily chart close above last week’s high at 4,158 would need to be seen.
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