FTSE 100, DAX 40 and DOW likely to slide further still
Outlook on FTSE 100, DAX 40 and DOW amid mixed corporate earnings and hawkish Fed comments.
FTSE 100 consolidation is ongoing
The FTSE 100 reached a six-week high at 7,919 on Tuesday and had advanced on ten consecutive days until then before levelling out amid higher-than-expected March UK inflation data and mixed earnings.
The blue-chip index has been sideways trading in a low volatility range since then and doesn’t seem to be too affected by worse-than-expected UK retail sales which on Friday morning showed a drop of 0.9% in March, following a downwardly revised 1.1% in February and compared to market expectations of 0.5%.
So far support at 7,872 underpins. It sits within a wider support zone seen between the 7,876 to 7,854 January high and late February low.
Were Tuesday’s high at 7,919 to be bettered, the early March high at 7,976 and the psychological 8,000 mark would be next in line.
DAX 40 comes further off its 15-month high
The DAX 40 reached a 15-month high at 15,903 earlier this week before tracking Wall Street lower on mixed earnings and hawkish Fed comments ahead of its blackout period.
A slip through Thursday’s low at 15,737 would engage the 15,709 March high which may act as support. If not, the 15,650 region may do so.
While last Thursday’s low at 15,657 holds, medium-term upside pressure should remain in play.
Minor resistance now sits at the 12 April high at 15,832 and more significant resistance at 15,903. Above it lurks the psychological 16,000 mark and also the November 2021 and January 2022 highs at 16,288 and 16,298.
Dow has been rejected by key downtrend line
The Dow Jones Industrial Average’s (Dow) advance from its March lows has managed to take it to its December-to-April downtrend line at 34,133 which provoked a short-term reversal to the downside on mixed corporate earnings results, heightened growth fears and hawkish Fed comments.
Both the Cleveland Fed President Loretta Mester, who expects a US recession but a ‘soft landing’, and the Philadelphia Fed Bank President Patrick Harper wish to see a policy rate of over 5% to combat inflation. These hawkish comments further weigh on stocks.
The Dow is thus on track for its fourth day of, albeit relatively small, losses and is expected to slide to the 4 April high at 33,690 below which more important support can be spotted at the 33,577 March peak.
Strong resistance sits at last and this week's highs at 34,105 to 34,133.
This information has been prepared by IG, a trading name of IG Markets Ltd and IG Markets South Africa Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Take a position on indices
Deal on the world’s major stock indices today.
- 1-point spread on the FTSE 100 and Germany 40
- The only provider to offer 24-hour pricing
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only
