FTSE 100, DAX 40 and S&P 500 on back foot after strong July rally
Outlook on FTSE 100, DAX 40 and S&P 500 as US equity indices continue to lead the way higher.
FTSE 100 gunning for the 7500 region
Last week the FTSE 100 finally broke through its key 7,349 to 7,376 resistance area on a daily chart closing basis on easing Federal Reserve (Fed) hike bets.
This resistance area which consists of the late June and 20 July high as well as the 200-day simple moving average (SMA) is now expected to act as support.
Thursday’s rise and daily close above 7,376 confirmed a double bottom with an upside target coming in around this year’s highs at 7,621 to 7,688 but first the 1 June low at 7,518 needs to be overcome.
Below 7,349 lies last Thursday’s low at 7,309. The index remains technically bullish while it stays above this level on a daily chart closing basis.
DAX rally nears the mid-June high at 13,676
The DAX 40 slid back to its 13,447 July high on weaker than expected German retail sales which tumbled to 1.6% month-on-month (MoM) in June versus a revised 1.2% in May and compared to a market forecast of an 0.2% increase before stabilising.
Further minor support can be seen along the one-month support line at 13,220 and more important support at the 13,030 late July low.
Provided that it underpins, the mid-June high at 13,676 and also the mid-May low at 13,685 continue to be in focus. If exceeded, a medium-term bullish reversal could lead to a several week-long rally taking the DAX 40 back towards its March-to-June highs at 14,712 to 14,927.
Support below last Tuesday’s low at 13,030 can be found at the 8 July high at 13,021 and also at the 19 July low at 12,823.
S&P 500 rally nears the May to June highs at 4,189 to 4,203
Late last week the S&P 500 accelerated to the upside, helped by Federal Reserve chair, Jerome Powell’s comments that slowing the pace of rate hikes whilst keeping a close eye on inflation and the economy might be appropriate and 78% of S&P 500 earnings so far beating expectations.
The index rose by close to 8% in July, its best performance in years, and is seen heading towards the May to June highs at 4,189 to 4,203 which are likely to offer resistance. at least in the short-term.
Minor support can be spotted at the early June lows at 4,077 to 4,074 and further potential support at the 22 July high at 4,012.
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