Dow and DAX advance, while Nikkei 225 struggles below 40,000
US indices are looking strong ahead of today’s inflation data, and the DAX has made gains too. Meanwhile, the Nikkei 225’s advance has run into some selling.
Dow climbs to new closing high
The Dow Jones index sits at a new record closing high, having enjoyed strong gains yesterday.
Today’s US consumer price index (CPI) reading might provide a road bump, particularly if the reading is stronger than expected, though overall the price has remained resilient over recent weeks despite rising tensions in the Middle East.
This week’s bounce from the lows around 41,800 has restored the short-term bullish view. A close back below this could then mark the beginning of a pullback towards the previous highs at 41,382.
DAX moves higher
A second day of gains yesterday has put new life into the DAX 40 index, bouncing from 19,000 and on a course to challenge the previous highs.
The bullish view has been given further reinforcement by the formation of a higher low around 19,000, having tested the late August highs at 18,935.
A push back to 19,500 looks likely, and a close back below 18,935 would be needed to suggest that the price has come under renewed selling pressure. This might then lead to a test of the rising 50-day simple moving average (SMA), currently 18,577.
Nikkei 225 rally stalls
Yesterday’s push higher has been reversed, with the Nikkei 225 index still chary about breaking above 40,000.
It continues to hold above trendline support from the September lows, avoiding any significant pullback in recent sessions. Further gains above 40,000 would open the way to the summer highs around 41,160 and then even to 42,485.
A break of trendline support could mark a bearish development and open the way to a test of the 50-day SMA once more.
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