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Indices push higher as negotiation hopes support risk appetite

Some signs of concessions in the Russia-Ukraine negotiations have given hope to investors, providing a reason for the bounce from the March lows to push on in morning trading.

1648543783015.jpgSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 29 March 2022 

FTSE 100

An indecisive day yesterday nonetheless saw the FTSE 100 hold its ground. Additional gains would bring 7570 into view, while beyond this the February peak at 7680 is a near-term target.

As yet sellers have been unable to wrest control of the index, but a move below 7400 could mark the start of at least a near-term retracement. 

FTSE_290322.pngSource: ProRealTime

DAX

Gains had stalled below 14,500 for most of mid-March, but the price is attempting to push on above here this morning.

Losses had been contained around the 14,150 mark, allowing the index to stabilise and begin a new push higher that could target 15,000 in the near term.

A break back above the 15,000 zone of support that prevailed through the latter half of 2021 would be needed to open the way to a challenge of the 2021 highs above 16,000.

DAX_290322.pngSource: ProRealTime

S&P 500

Fresh gains yesterday put the S&P 500 above the 100-day simple moving average (SMA) of 4542 for the first time since mid-January. Almost 500 points have been added in a bounce from the lows of March.

The early-February lower high at 4590 now looms, and a move above here would mean that the 4740 and then 4812 highs from January are the next targets to the upside.

SPX_290322.pngSource: ProRealTime
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Indices mixed as traders assess Russia-Ukraine peace talks

The FTSE 100 and DAX 40 stall at key technical resistance while the S&P 500 continues to be bid despite the US 10-2 yield spread inverting overnight, pointing to a looming recession.

BG_chart_indices_stocks_098213234.jpgSource: Bloomberg
 Axel Rudolph | Market Analyst, London | Publication date: Wednesday 30 March 2022 

FTSE 100 drifts after broad rally

Yesterday the FTSE 100 tried to overcome its 25 February high at 7,564 on hopes of a peace accord between Russia and Ukraine but this morning the index is trading back around this level as Ukrainian scepticism is being assessed by market participants.

Nonetheless the trend continues to point upwards and a rise above yesterday’s high at 7,585 would push the February peak at 7,688 to the fore.

Slips below the 23 March high at 7,522 should find support along the 55-day simple moving average (SMA) at 7,437 and further down at the 23 March low at 7,419.

30032022_UKX-Daily.pngSource: ProRealTime

DAX 40 capped by key resistance area

The DAX 40 has reached a key multi-year resistance area which sits between 14,840 and 14,917 and goes back to May 2021 on the back of hopes of a settlement being reached between Russia and Ukraine.

This resistance caps for now and may lead to a minor retracement back towards the 23 March high at 14,584 taking place. Much further down last week’s low can be spotted at 14,187.

In case of yesterday’s high at 14,927 being exceeded, the 200-day SMA at 15,429 would be targeted over the coming days.

30032022_DAX-Daily.pngSource: ProRealTime

S&P 500 continues its steep ascent despite US yield curve inverting

The S&P 500’s rally is ongoing with the index having risen and, more importantly, closed above its 4,595 early February high which represented key technical resistance.

It did so on hopes of a peace agreement between Russia and Ukraine being signed and despite the US 10-2 year yield spread briefly inverting overnight, historically a pointer to an upcoming recession.

The 12 January high at 4,748 constitutes the next upside target with minor support below the 4,595 level being found at the 10 January 4,582 low.

30032022_SPTRD-Daily.pngSource: ProRealTime
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Indices mixed ahead of end of wild quarter

The DAX 40 stays below key technical resistance while the FTSE 100 and S&P 500 remain bid into quarter end.

BG_index_indices_FTSE_Nikkei_Dow_DAX.jpgSource: Bloomberg
 Axel Rudolph | Market Analyst, London | Publication date: Thursday 31 March 2022 

FTSE 100 continues its gradual advance

The FTSE 100 continues to trade around its 25 February high at 7,564 as traders mull a potential peace accord between Russia and Ukraine.

Nonetheless the trend continues to point upwards and a rise above this week’s high at 7,585 would target the February peak at 7,688.

Potential retracements below the 23 March high at 7,522 should find support along the 55-day simple moving average (SMA) at 7,438 and further down at the 23 March low at 7,419.

31032022_UKX-Daily.pngSource: ProRealTime

DAX 40 consolidates below key resistance area

On Tuesday the DAX 40 probed a key multi-year resistance area which sits between 14,840 and 14,917 and goes back to May 2021 on the back of hopes of a settlement being reached between Russia and Ukraine. This has, however, since provoked a reversal as uncertainty increased.

This resistance zone is expected to continue to cap for the time being and may lead to a minor retracement back towards yesterday’s low at 14,528 unfolding. If fallen through, last week’s low at 14,187 may be revisited.

In case of this week’s high at 14,927 being exceeded, the 200-day SMA at 15,424 would be targeted next.

31032022_DAX-Daily.pngSource: ProRealTime

S&P 500 remains above previous resistance, now support, at 4,595 to 4,591

The S&P 500 rally is taking a breather with the index having traded around its 4,595 early February high over the last few days on hopes of a possible peace agreement between Russia and Ukraine taking shape.

Were this week’s high at 4,637 to be bettered, the 12 January high at 4,748 would represent the next upside target while minor support below yesterday’s low at 4,581 comes in between the 22 and 24 March highs at 4,530 to 4,521.

31032022_SPTRD-Daily.pngSource: ProRealTime
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Indices push higher on the first day of a new quarter

After a disappointing end to Q1 yesterday, stock markets are attempting to put their best foot forward.

BG_ftse_100_ukx_index_indices_stocks_lonSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 01 April 2022 

FTSE 100

The FTSE 100 dropped back yesterday, closing out the quarter on a weaker note, though it has performed much better than some of its peers. Further gains still target the 7690 highs from February.

In the event of a deeper retracement, the index may find support towards 7395, 7372 or down towards 7250.

FTSE_010422.pngSource: ProRealTime

DAX

The DAX is holding its ground in early trading, having fallen back over the past two days. The index held the 14,130 area in mid-March, so this may provide support, with 13,825 and 13,600 below this in the short-term.

A recovery back above 14,800 would suggest that a new move higher is underway, potentially bringing 15,500 into view.

DAX_010422.pngSource: ProRealTime

S&P 500

After the rally from the March lows, the S&P 500 has encountered a bump in the road, falling back to the 100-day simple moving average (SMA) at 4540. Areas of possible support in the event of a downturn would be 4450 and then 4390.

As with the DAX, traders would view a recovery above this week’s highs as a bullish development. For this index, the level to watch is 4630.

SPX_010422.pngSource: ProRealTime
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DAX struggles while FTSE 100 & S&P 500 look for further gains

Once again the DAX is under pressure, but both the FTSE 100 and S&P 500 are looking to resume their moves higher.

BG_ftse_100_ukx_index_indices_9887897.jpSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 04 April 2022

FTSE 100

Friday saw the FTSE 100 reverse its losses from the last day of the quarter the previous day, and a small gain so far on the open suggests the buyers remain in control.

This puts the recent February highs near 7700 back into view, as the index looks to make headway thanks to strong commodity prices and rising yields, which bolster financial stocks.

Sellers will have to wait for a reversal back below 7430, which would suggest a short-term leg lower.

FTSE_0404022.pngSource: ProRealTime

DAX

The DAX remains below last week’s high, but has managed to avoid any further losses so far.

As yet the 14,150 support level from mid-March has yet to be tested once again. Additional gains would put the 14,840 high from last week into view, and then on to 15,047 and 15,510.

It would need a break of the mid-March support zone of 14,150 to suggest a broader decline is at hand, although with the price firmly below the 200-day simple moving average (SMA), there is still the potential for a resumption of the January and February declines.

DAX_040422.pngSource: ProRealTime

S&P 500

Friday saw the S&P 500 stabilise and then reverse its losses, after a strong payroll reading that provided some additional confidence in the underlying foundations of the US recovery.

The price managed to move back above the 100-day SMA (4538) and is now targeting last week’s highs around 4630. From there 4735 and 4800 come into view.

A more bearish case requires a reversal back below Friday’s lows of 4507.

SPX_040422.pngSource: ProRealTime
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Indices lack direction

The FTSE 100, DAX 40 and Nasdaq 100 remain bid but are so far being capped by resistance over worries of the impact further sanctions on Russia might have on the outlook for European economies.

 

 

 Axel Rudolph | Market Analyst, London | Publication date: Tuesday 05 April 2022 

FTSE 100 range trades below its 7,593 late March high

The FTSE 100 continues to trade around its 25 February high at 7,564 but below its late March high at 7,593 as traders mull the prospect of further sanctions against Russia.

Nonetheless the trend continues to point upwards and a rise above last week’s high at 7,593 would target the February peak at 7,688.

Minor support remains to be seen at the 23 March high at 7,522 below which sits the 31 March low at 7,489.

While above there, immediate upside pressure should be maintained. Below 7,489 meanders the 55-day simple moving average (SMA) at 7,436 and further down the 23 March low can be made out at 7,419.

05042022_UKX-Daily.pngSource: ProRealTime

DAX 40 remains below key resistance area

The DAX 40 tried but so far failed to reach the 55-day SMA at 14,667 amid worries of further sanctions being imposed on Russia and the impact these may have on European economies.

The index thus remains below key multi-year resistance at 14,840 to 14,917 which goes back to May 2021. At present a slide back towards the last week’s low at 14,323 looks to be on the cards. If slipped through, the 24 March low at 14,187 may be revisited.

In case of the March high at 14,927 being exceeded, the 200-day SMA at 15,406 would be in focus, however.

05042022_DAX-Daily.pngSource: ProRealTime

Nasdaq 100 flirts with 200-day SMA at 15,172

US stock futures started the week on the front foot thanks to news that the Chinese regulator would make changes to rules regarding confidentiality, allowing US auditors to access sensitive financial information. This prompted a surge in technology stocks and led to the Nasdaq 100 resuming its ascent.

The index is currently grappling with the 200-day SMA, mid-January low and February high at 15,172 to 15,276 which capped last week.

If 15,276 were to be overcome on a daily chart closing basis, a double bottom upside target of 15,845 could be reached. It is the distance between the 14,395 early March high to the 12,945 March low, projected upwards from the breakout point at 14,395.

Only a currently unexpected slip through Friday’s low at 14,723 would negate the currently bullish bias and may provoke a deeper retracement back towards the 55-day SMA at 14,328.

05042022_NASDAQ-Daily.pngSource: ProRealTime
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Indices outlook: European indices on the back foot ahead of Fed minutes release

The FTSE 100, DAX 40 and S&P 500 have given back recent gains ahead of tonight’s publication of FOMC minutes as investors worry about the Fed soon aggressively reducing its balance sheet.

indicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Wednesday 06 April 2022

FTSE 100 gunning for its 7,688 February high

The FTSE 100 has managed to heave itself above the 25 February high as it continues its ascent towards the February peak at 7,688, unperturbed by worries about the Federal Reserve (Fed) reducing its balance sheet next month.

The ongoing advance in the index probably has to do with the FTSE 100 having a more defensive makeup than its peers.

Minor support below yesterday’s low at 7,536 remains to be seen at the 23 March high at 7,522, below which sits the 31 March low at 7,489. While above there, the bulls should remain in charge.

Below 7,489 meanders the 55-day simple moving average (SMA) at 7,438.

FTSE 100 chartSource: ProRealTime

DAX 40 stays below 55-day simple moving average

The DAX 40 is still trading sideways below the 55-day SMA at 14,642, having been dragged lower by US and Asian markets overnight following hawkish comments by one of the US Federal Reserve's usually more dovish members.

Vice chair-elect, Lael Brainard, said that she sees a balance sheet reduction soon and 'at a rapid pace..., if warranted.'

The index has so far revisited last week’s low at 14,323 below which lies the 24 March low at 14,187. Only a rise above yesterday’s high and the 55-day SMA at 14,642 would push the 2022 downtrend line at 14,785 to the fore, above which key multi-year resistance remains to be seen at 14,840 to 14,917. This goes all the way back to May 2021.

In case of the March high at 14,927 being exceeded, the 200-day SMA at 15,399 would be targeted.

DAX 40 chartSource: ProRealTime

S&P 500 slips back towards 200-day simple moving average

Yesterday the S&P 500 formed a Bearish Engulfing pattern on the daily candlestick chart as US bonds dropped aggressively on the back of the Fed’s known dove, Lael Brainard’s comments which put the reduction in the Fed’s balance sheet back at the centre of the monetary policy discussion.

A slide towards the 200-day SMA at 4,495 is currently underway. Below it there is no significant support to speak of until the 55-day SMA and the early March high at 4,414 to 4,422.

Only a currently unexpected rise and daily chart close above yesterday’s high at 4,593 would negate the current bearish bias.

S&P 500 chartSource: ProRealTime
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Futures slide as Fed minutes confirm a hawkish turn

The DAX 40 and DOW have taken a hit as FOMC minutes show that the Fed is looking at aggressively reducing its balance sheet, whereas the FTSE’s defensive make-up gives it a more positive outlook.

BG_ftse_100_ukx_index_indices_9887897.jpSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Thursday 07 April 2022 

FTSE 100 hardly affected by Fed tightening

The FTSE 100 has hardly been impacted by yesterday’s publication of the Federal Open Market Committee (FOMC) minutes which confirmed the US Federal Reserve’s (Fed) hawkish stance and its aim of a rapid balance sheet unwind due to the index’s defensive make-up, with the likes of AstraZeneca trading at new all-time highs.

However, the daily chart of the FTSE 100 does display negative divergence on the daily RSI, which points to a probable consolidation taking place soon.

A slip through yesterday’s low at 7,534 would likely trigger a move to the 23 March high at 7,522, below which sits the 31 March low at 7,489. While above there, the bulls should remain in charge, however.

Below 7,489 meanders the 55-day simple moving average (SMA) at 7,438.

Were this week’s high at 7,619 to be exceeded, however, the January and mid-February highs at 7,633 to 7,634 would be targeted and also the February peak at 7,688.

FTSE 100 chartSource: ProRealTime

DAX 40 drops towards the 38.2% Fibonacci retracement at 13,975

The DAX 40 has taken a hit following recent hawkish comments by Fed officials talking of a rapid balance sheet reduction, sending US bonds and stocks tumbling and dragging most world indices down with them.

The index has come close to the 38.2% Fibonacci retracement of its March rally at 13,975 around which it may be trying to stabilise today. Technically the bulls should retain the upper hand for now since the March rally can be subdivided into five Elliott waves and the decline from the late March high at 14,927 into three corrective A, B and C waves. This is normal price behaviour and should be followed by another five waves to the upside.

For such a bullish scenario to be confirmed, a rise above this week’s high at 14,605 needs to be seen, though. In case of further downside being witnessed, the 24 February low and 50% retracement at 13,795 to 13,680 may offer a potential support area ahead of the 15 March trough at 13,577.

DAX 40 chartSource: ProRealTime

Dow capped flirts with 55-day SMA ahead of support

The Dow Jones Industrials Average has declined over the last few days amid hawkish comments from US Fed officials, many of whom apparently would have preferred a 50 basis point increase in the Fed funds rate, instead of last month’s 25 basis points, minutes of the March meeting showed.

Concerning the balance sheet reduction, they agreed to monthly caps of around $60 billion for Treasury securities and $35 billion for mortgage-backed securities, phased in over a period of around three months. That is higher than $50 billion a month cut the Fed made back in 2017-2019.

So far, the Dow has slid to the 55-day simple moving average (SMA) at 34,317, to marginally above an important support zone at 34,181 to 33,979. It consists of the breached 2022 downtrend line, which going forward may act as a support line, as well as the 22 February to 3 March highs.

Further down the 11 March high at 33,698 may act as support. A bullish reversal and advance above the 200-day SMA at 35,027 and this week’s high at 35,105 is needed for the March uptrend to resume.

DJI chartSource: ProRealTime
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Indices look for additional gains after Thursday’s US recovery

US markets turned higher late in Thursday’s session, and this has helped risk appetite recover in early trading today.

BG_data_chart_stocks_indices_index_24324Source: Bloomberg
 
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 08 April 2022 

FTSE 100 targets February highs

The index has shrugged off the weakness from the middle of the week, rallying off the lows of each of the preceding three sessions, and is now on course to head back to the February highs at 7700.

It has done much better than its continental European peers of late, recouping most of the ground lost in the February and March drop, and avoiding any indication of a fresh turn lower.

Renewed bullish momentum would seem to beckon, especially once the index breaches the February highs. From here the 2018 record high at 7903 becomes the next major target, a remarkable recovery both from the March 2022 low and from the sub-5000 level seen during the pandemic.

FTSE 100 chartSource: ProRealTime

DAX supported by dip buyers

The buyers have come in to rescue the DAX from further declines it seems, at least for now.

The pullback from the late March high appears to be halted, with the index finding support at 14,130. A recovery off this level then brings the 14,840 level into view, while a move above this will continue the recovery of losses suffered in February.

Sellers will need to see the price drop back below this week’s lows at 14,026, which would revive expectations of further losses and suggest that the high from late March is a lower high and part of a bearish trend.

European markets continue to struggle due to their closeness with the Russian economy, and fears that the conflict in Ukraine may yet spread.

While the FTSE 100 has benefited from its heavy oil and mining contingent, companies in the DAX are feeling the effects of higher prices and tighter supply, which continues to squeeze margins.

DAX chartSource: ProRealTime

S&P 500 pushes higher after late rebound

A recovery for the S&P 500 yesterday has meant that the price has opened back above the 200-day simple moving average (SMA), reversing some of the bearishness that had been building since the pullback from the late March high.

Additional gains here now target the record highs from January at 4800. For now the bearish view has been put into abeyance, with a move back below this week’s lows at 4450 needed to suggest a fresh move to the downside.

US earnings season is fast approaching, and while further growth is expected, investors will be on watch for commentary about inflation, squeezed margins hurting profitability, and weakness in consumer spending due to the higher price of essentials.

Now that the immediate post-pandemic rebound is out of the way, the question is whether indices can sustain themselves at these levels or whether the worsening economic outlook will make further upside difficult to achieve.

S&P 500 chartSource: ProRealTime
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  • 2 weeks later...

FTSE 100 & S&P 500 higher but DAX struggling

The FTSE 100 has come back from its long weekend and is trying to move higher, but the DAX remains under pressure. Meanwhile, the S&P 500 is hoping for better news on earnings to build a rally.

FTSE 100Source: Bloomberg
 
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 19 April 2022 

FTSE 100 still eyes recent peak

The more encouraging picture for the FTSE 100 remains broadly in place.

The index spent the best part of its shortened week last week recovering lost ground, in an admittedly cautious fashion, but it was nonetheless able to push back towards the 7630 level and has continued this run in early trading on Tuesday.

Commodity prices are once again playing their part, moving higher and providing a reason for the mining and oil elements of the index to make headway.

The next targets to the upside remain 7690 and then 7730, as the index looks to recoup the February 2022 highs, and then move on to recover levels not seen since early 2018. A push above 7690 would mark a break to the upside from those February highs, and help to revive a more bullish view.

For now a short-term bearish view seems difficult to construct, but a drop back below 7530 would reverse the gains of the last few sessions and provide hope to the sellers.

FTSE 100 chartSource: ProRealTime

DAX continues to hold support

The sideways movement of the past few days continues.

Bank holidays in much of Europe have meant that trading activity has been light, but the European Central Bank's (ECB) surprise dovishness at last week’s meeting has helped European stock markets to steady themselves.

Fears of a hawkish turn in policy have been allayed for now, reducing concerns about the impact of higher interest rates on the economy and earnings, but the worries about inflation of course remain in place.

The decline from the end of March seems to have stalled for the time being, and the index continues to hold just above 14,000. However, gains over the last few sessions have been contained at 14,175.

Buyers emboldened by a higher low will need to drive the price through this area in order to bolster the bullish outlook. This would then bring 14,840 into view once again.

DAX chartSource: ProRealTime

S&P 500 moves back above 4400

Hopes of a bounce last week were dashed when the index lurched lower on Thursday.

Earnings from the banks, which kicked off earnings season in their traditional place, failed to do much to inspire bullishness, as comments about a slowing economy, the impact of inflation and the risks of higher interest rates provided little in the way of good news.

A broader swathe of companies begin to report from this week onwards, although many of the same concerns remain. T

hursday saw the index slump back below the 50-day simple moving average (SMA), and while the price recovered yesterday, it remains below the 50-day MA.

This drop below 4390 put the price below resistance once again, but it did recover to reclaim 4400 and leave hope for the buyers that a bounce may yet materialise.

Continued declines over the medium term bring the March low back into view.

S&P 500 chartSource: ProRealTime
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European indices bid on back of stronger US and Asian markets

Technical outlook on FTSE 100, DAX 40, and DOW, all of which have bounced off support.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Wednesday 20 April 2022 

FTSE 100 retains its slight bullish bias

Yesterday the FTSE 100 briefly slid to minor support at 7,566 amid ongoing fears about soaring inflation, central bank tightening and rising bond yields, before recouping its intraday losses.

Today the index is likely to stay above the 7,566 support level with the early April high at 7,671 remaining in sight, a rise above which would engage the January 2020 and February 2022 highs at 7,688 to 7,690.

Despite upside momentum flattening out over the past week or so, a series of higher highs and higher lows, the definition of an uptrend, remains to be seen on the daily FTSE 100 chart and will continue to do so while the index trades above the 7,536 to 7,522 zone. It contains the 23 March high and 4 to 12 April lows and should offer support, if revisited.

Below it meanders the 55-day simple moving average (SMA) at 7,457.

Minor resistance for today sits at yesterday’s 7,634 high, and more significant resistance in the 7,671 to 7,690 region. Were this resistance zone to be exceeded, the July 2019 high at 7,730 would be targeted next.

FTSE 100 chartSource: ProRealTime

DAX 40 sees minor recovery rally

The descent in the DAX 40, caused by the US Federal Reserve’s (Fed) hawkish stance and it's mention of a rapid balance sheet reduction, as well as the ongoing war in Ukraine and worries about the outcome of the French presidential election, last week to the index briefly below the 38.2% Fibonacci retracement of its March rally at 13,975, to 13,882, before stabilising.

As long as last week’s low at 13,882 isn’t slipped through, a recovery towards the 31 March low at 14,323 and the 55-day SMA at 14,420 is on the cards.

For the March uptrend to resume, the 5 April high and this year’s downtrend line at 14,582 to 14,605 would need to be exceeded.

Failure at last week’s 13,882 low would push the 24 February low and 50% retracement at 13,795 to 13,680 to the fore. This area offers potential support ahead of the 15 March trough at 13,577.

DAX 40 chartSource: ProRealTime

Dow nears the 200-day SMA at 35,026

The Dow Jones Industrial Average’s two-week long decline amid rapidly rising Treasury yields on expectations of a more aggressive Fed tightening to tame soaring inflation looks to have ended last week in the key 34,181 to 33,979 support area.

It consists of the 22 February to early March high as well as the breached 2022 downtrend line which, because of inverse polarity, acted as a support line, from where the current up leg began. A rise towards the 2022 resistance line, 200-day SMA and 5 April high at 35,010 to 35,105 is currently underway.

The next higher March peak at 35,383 will need to be overcome for the bulls to be firmly back in the driving seat. Slips should find support between the 1 April low and Monday’s high at 34,625 to 34,537.

Further down the 55-day SMA can be spotted at 34,351.

DJIA chartSource: ProRealTime
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Better US earnings lift European indices

Technical outlook on FTSE 100, CAC 40 after yesterday’s French election television debate, and S&P 500, all of which continue to advance.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Thursday 21 April 2022 

FTSE 100 continues to gradually advance

The gradual rise in the FTSE 100 is ongoing despite worries about soaring inflation, central bank tightening and rising bond yields.

The early April high at 7,671 is now within reach, a rise above which would target the January 2020 and February 2022 highs at 7,688 to 7,690. Were this resistance zone to be bettered, the July 2019 high at 7,730 would be targeted next.

Minor support comes in at Tuesday’s 7,566 low with further support seen in the 7,536 to 7,522 zone which incorporates the 23 March high and 4 to 12 April lows.

Further down meanders the 55-day simple moving average (SMA) at 7,459.

FTSE 100 chartSource: ProRealTime

CAC 40 continues to rise after French presidential election television debate

The CAC 40’s ascent, which began last week from slightly above the 6,421 to 6,378 support zone, continues after yesterday’s French presidential election television debate between the incumbent, Emmanuel Macron and his right-wing rival, Marine Le Pen.

According to market research company IPSOS, a poll taken just before the debate gave President Macron a lead of around 13 points with a projected 56.5% of the vote. The outcome of the debate is not expected to have altered this projection much.

The CAC 40 has now risen above the 55-day SMA at 6,630 and is about to hit a two-month resistance line at 6,664 today with the 16 and 23 March highs at 6,681 to 6,702 representing additional upside targets. Ultimately the 200-day SMA and the March peak at 6,783 to 6,831 should be reached as long as no slip through the 6,421 to 6,378 support zone ensues.

Minor support above this area can be found along the two-month support line at 6,544 and also at Tuesday’s 6,493 low.

CAC 40 chartSource: ProRealTime

S&P 500 approaches the 200-day SMA at 4,500

The S&P 500’s recovery from last week’s low at 6,367, made close to the 50% retracement of the February-to-March advance at 4,373 amid worries of an aggressively tightening US monetary policy and soaring Treasury yields, is ongoing with the 200-day SMA at 4,500 within reach now that US yields are softening.

The next upside target is the 8 April high at 4,525, above which the 10 January low, early February and 5 April highs can be spotted at 4,581 to 4,595. Support below the 6 April low at 4,450 comes in along the 55-day SMA at 4,419.

Only a currently unexpected fall and daily chart close below last week’s low at 4,367 would negate the once more bullish bias.

S&P 500 chartSource: ProRealTime
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  • 2 weeks later...

FTSE 100 looks for more gains as DAX and S&P 500 keep struggling

While the S&P 500 has returned to its March lows, and the DAX remains unable to break higher, the FTSE 100 is looking to move back to its previous highs.

FTSE 100Source: Bloomberg
 
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 03 May 2022 

FTSE 100 outshines its peers

After an indecisive session for the futures yesterday thanks to early weakness in Europe and then a recovery in US markets, the FTSE 100 is moving higher in early trading.

Last Friday saw a weak end to the month of April, as recession and inflation fears once again came to the fore. Despite the expectation that the Federal Reserve (Fed) and Bank of England (BoE) will increase rates this week, markets have begun the month on the front foot.

Additional gains target 7580, the highs from the second half of last week, while beyond this the highs of February and April around 7690 come into view.

Stronger commodity prices continue to provide the support for the index that others are lacking, and the absence of richly-valued tech names remains a powerful boon for the index in these changed times.

FTSE 100 chartSource: ProRealTime

DAX pinned below 50-day SMA

This index also struggled yesterday, being unable to establish a firm direction. However, it has pushed higher overall from last week’s lows at 13,600, even if the price remains stuck below the 50-day simple moving average (SMA), currently 14,114.

Fears about the impact a ban on Russian energy imports will have continue to hang over European markets.

A more bullish case requires a move back above the 50-day SMA, in order to open the path to the recent peak at 14,500, last seen in late April. This needs breaching to the upside if the price is to break the run of lower highs that has dominated since the beginning of the year.

Alternately, a fresh bearish move needs to break back below the lows of last week at 13,600, something that would hand the advantage to the sellers and bring the March lows back into view as a potential destination.

DAX chartSource: ProRealTime

S&P 500 hovers nears March lows

Rebounds in this index continue to melt away, something seen last week when the bounce of Wednesday and Thursday turned into a fresh slump on Friday.

This continued into the new week and the new month, with the index returning to the March lows at 4120 and even moving below it, to its lowest level in a year.

However, the 4120 level continues to hold for the time being, providing hope that a bounce can still materialise. If it does, the 50-day SMA and then the 4400 area come into view, followed up by the 200-day SMA (currently 4496).

Further declines below 4060, yesterday’s low, would put the 4034 and then 4000 levels into play.

S&P 500 chartSource: ProRealTime
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European indices little changed ahead of US Fed rate decision

Trading outlook on FTSE 100, DAX 40 and Nasdaq 100 ahead of today’s anticipated 50 basis point US Fed rate hike.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Wednesday 04 May 2022 

FTSE 100 flirts with late April high

The FTSE 100’s recovery rally from its 7,299 late April low, made close to the 200-day simple moving average (SMA) and seen amid concerns over rapid rate hikes and weaker global growth, is taking it back towards the late April high at 7,582 ahead of Thursday’s Bank of England (BoE) rate decision.

Above the 7,582 high beckons key resistance in the 7,657 to 7690 region which comprises the January 2020, February and April highs and as such is likely to cap for the time being.

Minor support below the 55-day SMA at 7440 can be spotted along the two-month support line and at this week’s low at 7,390 to 7,387 with further support being found between the 200-day SMA and the late April low at 7,309 to 7,299.

Only currently unexpected failure at 7,299 would push the 50% retracement of the March-to-April advance at 7,218, and perhaps also the February low at 7,177, to the fore.

FTSE 100 chartSource: ProRealTime

DAX 40 trying to retain short-term positive momentum

The DAX 40’s recovery from its 13,538 late April low, helped by improved US earnings, has been struggling below the 55-day SMA at 14,179 ahead of today’s anticipated 50 basis point rate hike by the US Federal Reserve (Fed).

For a bullish picture to emerge, a rise and daily chart close above last week’s high at 14,190 will need to be seen. If so, the 2022 downtrend line at 14,389 will be back in the picture. Slips should find support around this week’s low at 13,807 and along the two-month support line at 13,718.

Only a drop through the recent low at 13,538 would put the 61.8% Fibonacci retracement of the March advance at 13,385, as well as the 11 March low at 13,277 back on the map.

DAX 40 chartSource: ProRealTime

Nasdaq 100 awaits FOMC rate decision

The Nasdaq 100’s swift descent has so far taken it to its 12,710 one-year low amid soaring inflation, a looming recession and mainly disappointing earnings from its constituents.

The index is attempting to hold above this year’s low at 12,710 while awaiting today’s US Federal Reserve rate decision with a 50 basis point increase priced in by the market but a 75 basis point rise not being excluded by some.

From a technical perspective the 13,106 to 12,945 February and March lows, together with the late April and this week’s lows at 12,805 to 12,710, remain key for the ensuing trend. A drop below the low at 12,710 would target the August and October 2020 highs and March 2021 low at 12,466 to 12,212.

For any kind of recovery to gain traction, a rise and daily chart close above last week’s highs at 13,542 to 13,582 would need to occur.

Nasdaq 100 chartSource: ProRealTime
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Stock markets enjoy gains following Fed meeting

Equity markets have made headway following the Fed’s rate hike, as Powell moves to rule out 75 bps hikes.

IndicesSource: Bloomberg
 
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 05 May 2022 

FTSE 100 pushes towards 7600

The fall in this index during the course of April was much less dramatic than that for US markets, and so the bounce here in the wake of the Federal Reserve (Fed) is much more modest.

However, the index recovered from yesterday’s losses and pushed back to unchanged overnight, and now looks to move on towards the previous highs in April at 7670 and 7690.

A break above 7700 puts the index on course for 7730, last seen in 2019, and then on to the 2018 highs at 7903.

A reversal below 7500 might suggest some further short-term weakness down towards 7400 and then 7300.

FTSE 100 chartSource: ProRealTime

DAX moves above 50-day SMA

The Fed’s move bolstered stocks around the globe, with this index no exception.

Having made small gains before the decision, the index was able to push higher in the wake of it, and closed above its 50-day simple moving average (SMA). From here the next target is the 14,500 peak from late April, which saw the index spike higher and then retreat.

Before this, trendline resistance from the late March high at 14,900 comes into view. A breakout above this would mark a bullish development, although we still need to see a higher high to finally put an end to the March/April downtrend.

If the index fails to break trendline resistance and turns lower, then the late April low at 13,600 comes back into view, with a drop below this bringing the possibility of further losses in the direction of the March low.

DAX 40 chartSource: ProRealTime

Dow soars back to 34,000

Fed chair, Jerome Powell’s comment ruling out 75 basis point hikes by the Fed appeared to provide the spark for a major rally in US stocks, including the Dow, which went from near 33,000 to 34,000 in the space of a couple of hours.

Crucially this means that the wide area of support around the February and March lows once again provided the foundation for an equity bounce. If the price can push on above the 50-day SMA (34,094) then the 34,500 and 200-day SMA at 34,976 come into view.

A reversal back below 33,500 could signal that sellers are regaining control, but a bigger move to the downside would need to push below April’s low at 32,500, and then on below February’s low at 32,200.

DJIA chartSource: ProRealTime
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FTSE 100 holding steady, but DAX and Nasdaq fall

The FTSE 100’s commodity stocks are helping it avoid more losses, but other markets are feeling the brunt of the risk off move.

 

 

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 06 May 2022 

FTSE 100 reverses course

The index fell back yesterday along with other markets as the post-Fed optimism evaporated.

However, it has not even fallen back to the lows of the week, let alone those of late April, nor has it shown any inclination to emulate US indices and return to its March low. This continued strength does at least provide a moderately bullish view.

A bounce back towards 7600 once again puts the 7700 highs into view, while beyond this 7903, the high from 2018 looms.

A drop below 7400 is needed to produce a more near-term negative view, bringing 7300 into view.

FTSE_060522.pngSource: ProRealTime

DAX heads lower

Here, too, the more bullish view of earlier in the week has given way to additional losses, with the 13,600 level now coming back into view as possible support.

European markets continue to take their cue from the US, although in a more muted form. However, concerns about the economic outlook continue to dominate here, and as a result the bearish view appears to hold sway on both a fundamental and technical basis.

Below 13,600 the price targets 13,200/13,190, and then down 12,500.

DAX_060522.pngSource: ProRealTime

Nasdaq 100 falls sharply

The Federal Reserve’s tightening efforts have meant that tech stocks have come under heavy pressure.

Yesterday the index retreated from 13,500, which had acted as resistance in late April. The 12,700 area now comes into view as possible support, but given the overall risk off outlook it seems further losses will come into view. In this case we look to the March 2021 lows around 12,300.

The current volatility has seen the price bounce between 12,900 and 13,500, so a rally above the latter is needed to suggest a bullish view has emerged.

NDX_060522.pngSource: ProRealTime
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FTSE 100, DAX and Dow pressured in early trading

The morning has seen indices head further into the red, as markets worry about the global economic outlook.

 

 

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Monday 09 May 2022 

FTSE 100 drops towards 200-day MA

The index continued its weak performance on Friday, and futures opened lower in overnight trading, as global concerns about economic growth continued to weigh heavily.

Despite further strength in oil prices, something that has helped the FTSE 100 to make gains of late, the broader picture remains less encouraging, as inflation and central bank rate hikes threaten to derail growth.

As a result this index has finally begun to suffer some notable losses, although it remains above the 200-day simple moving average (SMA) for the time being.

Further declines below the 200-day MA bring 7230 into play, and then on down to 7060, while a bounce back above 7500 might restore a measure of the bullish view, then bringing 7600 and 7670 into play.

FTSE_090522.pngSource: ProRealTime

DAX edges below April low

Worries about global economic growth have hit this index, knocking it back after the rally of late April.

China’s trade data overnight, which showed export growth fell to its lowest level in two years, will not have helped matters. The last two days of last week saw the index drop back below the 50-day SMA (14,057) and the push back to 13,600, where it bounced in late April.

A poor start to the week has seen the index open below this level, which means it is now eating into more of the March bounce, bringing 13,190 and lower into play.

A rebound above 14,000 would be needed to restore a more bullish view.

DAX_090522.pngSource: ProRealTime

Dow hovers near March low

After plummeting last week, the index is now right in the middle of the support zone that held in February and March.

The price action last week reflected the see-saw between optimism and then pessimism around the Fed meeting and the potential speeding up of policy tightening.

For now this support zone continues to hold, providing some short-term optimism for embattled buyers, although there remains plenty of concern about the economic outlook.

If the support zone continues to hold then an initial target is 34,100, the highs from last week, and then on towards 34,300.

Declines would bring 30,544 and then 30,050 into view.

Dow_090522.pngSource: ProRealTime
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FTSE 100, DAX and Dow make small gains

The attempt at stabilisation continues in indices, after the recent run of losses.

BG_ftse_100_ukx_index_indices_stocks_lonSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Wednesday 11 May 2022 

FTSE 100

The index has managed to edge higher over the past 24 hours, recouping some lost ground from Monday’s session, and holding support around 7215 for now.

Additional gains would target the 200-day simple moving average (SMA), currently 7316, and then on towards 7600.

However, the broader global outlook remains negative at best, which could result in a reversal that tests 7200 and lower, eating into the bounce from March.

FTSE_110522.pngSource: ProRealTime

DAX

The bounce from the lows of the week continues, with a recovery above 13,600 providing a short-term bullish move, putting the price above the late April low.

Additional upside then comes into play around the 50-day SMA at 14,034, and then on towards 14,200.

A reversal below 13,350 opens the way to additional downside towards the March lows.

DAX_110522.pngSource: ProRealTime

Dow

An attempt to bounce yesterday ended with the index still unable to push higher, although it remains in the support zone around 31,500, if only just.

It would take a bounce back above 32,800 to provide a short-term bullish view and suggest that another bounce could be in play.

Dow_110522.pngSource: ProRealTime
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Indices remain under heavy pressure

Stock markets continue to fall, with little sign of any lasting bounce beginning.

BG_index_indices_FTSE_Nikkei_Dow_DAX.jpgSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Thursday 12 May 2022

DAX

A fresh 1% decline in early trading today suggests that a broader reversal could be in play, one that might see the bounce of the previous two days will be erased.

This would bring 13,274 into view, and then on down towards 13,190 and 12,954.

The drop from yesterday’s high seems to negate the bullish case for the time being.

DAX_120522.pngSource: ProRealTime

Nasdaq 100

A yawning chasm looms now that the price has fallen below 12,290.

The next big level to watch for would appear to be 10,960, last seen in the fourth quarter 2020.

With the price so heavily beaten-down, and breadth indicators also at a low ebb, a rebound here could be dramatic, and might see the price recover 12,000 and then 13,000 in short order.

However, it would need a sustained bounce above the 50-day simple moving average (SMA) to provide a more bullish view.

NDX_120522.pngSource: ProRealTime

Nikkei

Sharp losses here have taken the index to a two-month low, and now the March lows down towards 24,500 seem to beckon.

A bounce from current levels would target 27,400, and then on to 28,340.

Nikkei_120522.pngSource: ProRealTime
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FTSE 100, DAX and Dow look for a bounce

A better day for markets yesterday has given hope that a bounce may be at hand after the recent run of heavy losses.

BG_ftse_100_ukx_index_indices_stocks_lonSource: Bloomberg
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 13 May 2022 

FTSE 100

After rallying from its lows yesterday the index has made further gains, pushing back to the 200-day simple moving average (SMA).

A recovery above here and above Wednesday’s high at 7354 would suggest a rebound is in play, pointing towards 7500 and then 7600.

The sellers will need to drive the price back below 7150 to indicate a bigger move to the downside is underway again.

FTSE_130522.pngSource: ProRealTime

DAX

The index continues to make headway, rallying from its oversold condition but remaining within the downtrend of the past month and more.

Further gains target the 50-day SMA at 14,033, and then on towards the early May lower high around 14,300.

A failure to clear this lower high would leave the downtrend intact and suggest more selling will begin.

Dax_130522.pngSource: ProRealTime

Dow

A bounce of around 800 points from yesterday’s low has certainly stemmed the selling for now, but there is a lot more work to be done if the price is to recover more lost ground and put in a durable low.

A recovery above 32,500 would put the price on its way to moving back above the support zone from February and March.

A failure to hold the past 24 hours of gains would suggest that the sellers retain the upper hand.

Dow_130522.pngSource: ProRealTime
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European indices open lower

Trading outlook on FTSE 100, DAX 40, and Nasdaq 100 ahead of tomorrow’s US retail sales data.

FTSE 100Source: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Monday 16 May 2022 

Sellers dampen Friday’s FTSE 100 2.6% rally

Friday’s 2.6% recovery rally in the FTSE 100 from last week’s 7,157 low, made close to the February low amid volatile trading due to recession fears, has been dampened by sellers early Monday morning who continue to worry about the outlook for the UK economy. 

Support below Wednesday’s 7,353 high can be spotted along the 200-day simple moving average (SMA) at 7,320 with further minor support coming in at the 7,299 April trough. Provided the latter level underpins, a continuation of the last few days’ advance is likely to take place in the course of this week.

A rise above today’s overnight high at 7,475 would push the 7,621 early May high back to the fore.

Above 7,621 still beckons key resistance which can be seen in the 7,657 to 7690 region. It contains the January 2020, February, and April highs.

FTSE 100 chartSource: ProRealTime

DAX 40 losing upside momentum below this year’s downtrend line

The DAX 40’s recovery rally from last week’s 13,275 low, triggered by investors making use of good buying opportunities at discounted levels in sectors such as commodities, healthcare and utilities, seems to be running out of steam slightly below this year’s downtrend line at 14,210.

Together with the early May high at 14,315, the downtrend is expected to thwart any further upside today. If not, the late April peak at 14,599 should cap.

Slips today are likely to find support between the mid-April low and Wednesday’s high at 13,882 to 13,875. Further minor support can be found at the 13,807 2 May low and at the 13,538 April trough.

Investors need to bear in mind that a fall through last week’s low at 13,275 would signal the continuation of this year’s bearish trend with the March low at 12,432 being back in focus in such a scenario.

For a longer-term bullish picture to emerge, a rise and daily chart close above the late April high at 14,599 needs to be witnessed.

DAX 40 chartSource: ProRealTime

Nasdaq 100 awaits US retail sales data

The Nasdaq 100’s swift descent has so far taken it to its 11,689 one-year low amid soaring inflation, a looming recession and mainly disappointing earnings from its constituents.

The tech-heavy Nasdaq Composite fell 2.8% last week despite staging a recovery rally on Friday as investors sought out good buying opportunities at the market’s recent lows, while keeping an eye on the US Federal Reserve’s (Fed) rate hike cycle ahead of this week’s US sales data.

From a technical perspective as long as minor support around the 9 May low at 12,102 holds today, Friday’s high at 12,430 may be revisited.

However, sbove this level last week’s highs and the breached February-to-early May support line, now - because of inverse polarity - resistance line, at 12,545 to 12,660 are expected to cap.

Nasdaq 100 chartSource: ProRealTime
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FTSE 100, DAX and S&P 500 make headway as rebound gathers pace

While there is a lot of ground to make up, indices continue to benefit from the change in risk appetite in recent days.

 

 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 17 May 2022

FTSE 100 aims for a return to recent highs

After Friday’s big rebound the index managed to shrug off some early weakness yesterday and make some more gains, putting in a very convincing low around 7200 for the time being.

Once again it is commodity prices that have come riding to the rescue, with oil’s gains yesterday helping to support index heavyweights like BP and Shell.

Further gains will put the index on course to test the previous highs of 7600, and then on to 7680/7700, where gains have stalled so far this year. Beyond this the medium-term level to watch would be 7900, last seen in early 2018.

The sellers have a tough job on their hands, and will need to reverse the bounce of the past two sessions, and drive the price back below 7200 if they are to open up the potential for more downside towards 6800.

FTSE 100 chartSource: ProRealTime

DAX returns to the 50-day SMA

The DAX has returned to the 50-day simple moving average (SMA), although the elegant sequence of lower highs and lower lows remains in place for this index, with a more convincing break to the upside yet to establish itself.

European markets have rebounded from last week’s lows with the rest of the global indices complex, but their weakness since February, driven in no small part by their proximity to the Ukraine conflict, means they will be closely-watched for any renewed signs of weakness.

The index was able to poke its head above the 50-day SMA yesterday for a brief period, and while it edged back overnight another positive day seems to be in the offing. Further upside targets the highs of two weeks ago around 14,250, and then on to the next lower high at 14,500.

A drop back below 14,000 could suggest that fresh weakness has arrived, and would put the index back on course to target last week’s lows at 13,350.

DAX 40 chartSource: ProRealTime

S&P 500 futures point higher

While it only puts a small dent in the losses suffered since the end of March, the index has managed to put in a bounce since Thursday’s low.

This has seen it recover from below 3900 and retake 4000, with the hope that at least a short-term bounce might develop.

Big tech, which makes up such a slab of the S&P 500, was a major faller over the past six weeks, explaining much of the index’s poor performance. Recession concerns are still high, so it might be tough for this bounce to extend much beyond the next two or three weeks.

The next level to watch on the upside now becomes 4120, with a recovery above here opening the way to the post-Federal Reserve highs at 4300.

On the flipside, a reversal now brings 3900 and then 3860 into view, and then below this a fresh lower low is created.

S&P 500 chartSource: ProRealTime
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European indices flat after Wall Street rally

Trading outlook on FTSE 100, DAX 40, and S&P 500 post US retail sales and UK inflation data.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Wednesday 18 May 2022 

FTSE 100 rally stalls as inflation hits 40-year high

The FTSE 100’s 5% rally from last week’s 7,157 low, made close to the February low amid volatile trading due to recession fears, seems to be slowing down as the UK annual inflation rate increased to 9% in April versus an expected 9.1%, its highest level since 1982, up from 7% in March.

Nonetheless a rise above today’s overnight high at 7,545 would put the 7,621 early May high on the map. Above this level key resistance still beckons at the 7,657 to 7690 region which is made up of the January 2020, February, and April highs and as such is likely to cap.

Support below yesterday’s 7,460 low can be found along the 55-day simple moving average (SMA) at 7,427 and also at the 2 May low at 7,390.

Provided the latter level underpins, a continuation of the last few days’ advance is likely to take place in the course of this week.

FTSE 100 chartSource: ProRealTime

DAX 40 revisits its breached downtrend line

The DAX 40’s 6% recovery rally from last week’s 13,275 low, triggered by investors buying stocks at discounted levels in sectors such as commodities, healthcare and utilities, seems to have paused at yesterday’s 14,282 high with it slipping back to this year’s breached downtrend line, now support line, at 14,172.

Slips are likely to find support along the 55-day SMA at 14,037 with further support seen between the mid-April low and Wednesday’s high at 13,882 to 13,875 not expected to be revisited today. Further minor support can be spotted at the 13,807 2 May low and at the 13,538 April trough.

While the index remains above yesterday’s low at 13,998 on a daily chart closing basis, the early May high at 14,315 may be probed. If bettered, the late April peak at 14,599 would be next in line.

For a longer-term bullish picture to emerge, a rise and daily chart close above the late April high at 14,599 needs to take place, though.

DAX 40 chartSource: ProRealTime

S&P 500 nears downtrend channel resistance line

The S&P 500’s recovery from last week’s low at 3,860, made close to the 38.2% Fibonacci retracement of the 2020-to-2022 advance at 3,812, is getting ever closer to the two-month downtrend channel resistance line at 4,119 as US retail sales rise for the fourth straight month.

Retail sales rose by 0.9% month-on-month in April, versus an expected 0.7%, following an upward revision to 1.4% in March, and showed that American consumers continued to spend despite high inflation, albeit at a slower pace than in the previous three months.

A break out of the downtrend channel and a rise above the 4,107 to 4,142 February and March lows on a daily chart closing basis is needed for the recent advance to gain traction.

If this were to happen, the late April and current May highs at 4,305 to 4,308 would be in focus, a rise above which would be encouraging for the bulls and could spell the end to this year’s decline.

Minor support below the psychological 4,000 mark can be seen around the 9 May low at 3,967 and more significant support at last week’s trough at 3,860.

S&P 500 chartSource: ProRealTime
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European indices open lower after worst Wall Street rout in two years

Technical outlook on FTSE 100, DAX 40, and Dow after disappointing US retailers’ earnings.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Thursday 19 May 2022 

FTSE 100 drops as inflation hits 40-year high

The FTSE 100’s 5% rally from last week’s 7,157 low, made close to the February low amid volatile trading due to recession fears, abruptly ended yesterday as the UK annual inflation rate rose to a 40-year high of 9% in April, up from 7% in March.

The 200-day simple moving average (SMA) at 7,324 may act as support today, together with the 7,299 April low. While this is the case, the 55-day SMA at 7,423 may be revisited.

Only a rise above yesterday’s high at 7,545 would push the 7,621 early May high back to the fore. Above this level key resistance remains to be seen in the 7,657 to 7690 region which is made up of the January 2020, February, and April highs and as such is likely to cap.

FTSE 100 chartSource: ProRealTime

Bearish Engulfing day points to lower levels

The DAX 40’s 6% recovery rally from last week’s 13,275 low, triggered by investors buying stocks at discounted levels in sectors such as commodities, healthcare and utilities, came to a sudden end yesterday when a Bearish Engulfing pattern was formed on the daily candlestick chart.

This occurs when the red (bearish) body of the candle – the distance between the open and close of that day – “engulfs” the previous day’s body. Further slips are thus in store with the April low at 13,538 representing a possible downside target. Below it the three-month support line can be found at 13,410 and the current May low at 13,275.

While the index remains above this month’s low at 13,275 on a daily chart closing basis, however, this week’s and the early May high at 14,282 to 14,315 may still be revisited. If bettered, the late April peak at 14,599 would be next in line.

For a longer-term bullish picture to emerge, a rise and daily chart close above the late April high at 14,599 needs to take place, though.

DAX 40 chartSource: ProRealTime

Worst fall in the Dow for two years has the 31,227 current May low in its sights

The rout in the Dow Jones Industrial Average is ongoing with it posting its biggest decline since June 2020 - over 3.5% - as disappointing quarterly earnings from major retailers weighed on the index.

The sharp sell-off came as major US retailers’ earnings indicated that inflation squeezed corporate profits. Target shares tumbled 25% in their worst drop since 1987 after the company missed analyst expectations amid higher prices and supply bottlenecks while cutting its profit forecast due to a surge in costs. Walmart stocks fell by 6.8% due to similar issues.

A slip through the current May low at 31,227 would engage the March 2021 low at 30,545 and possibly the major 29,871 to 29,194 support area which consists of the February 2020 pre-pandemic and August 2020 highs, December 2020 and January 2021 lows, 38.2% Fibonacci retracement of the 2020-to-2022 advance and 200-week SMA.

Were the Dow to stabilise around its 31,227 recent May low, the February low at 32,234 may be retested.

DJIA chartSource: ProRealTime
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FTSE 100, DAX and S&P 500 stabilise after China cuts rates

News of policy easing in China allowed indices to push higher overnight, leading to hopes of a more positive end to a choppy week.

IndicesSource: Bloomberg
 
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Friday 20 May 2022 

FTSE 100 edges higher

Yesterday’s price action saw the index rebound from a one-week low and end the session back above the 200-day simple moving average (SMA).

After reversing the gains of the first part of the week, the buyers have stepped in to defend the index, aiming for continued upside that will bring 7570 and then 7600 back into play as upside targets.

Some weakness in the US dollar will help commodity prices, providing a lift to oil stocks, while miners in the index will likely follow the lead of their Australian counterparts and rally in response to the People's Bank of China's (PBoC) decision to cut one of its lending rates overnight in a bid to boost the economy.

A reversal below 7218, yesterday’s low, would see the price once again test the early May lows around 7180, before continued declines that would bring the March lows into view.

FTSE 100 chartSource: ProRealTime

DAX claws back some of Wednesday’s losses

Unlike some previous sharp drops over the past month, Wednesday’s slump for the index did not deliver much of a bearish follow-on.

Admittedly the price did hit a one-week low, but it found strength in the latter part of the session and finished around 200 points higher. 

Additional gains have come through overnight following news of the PBoC’s rate cut, and now the 50-day SMA at 14,117, and then the highs of the week at 14,260, become potential targets in an upside move.

A fresh bearish view requires a reversal back below 13,600, which would suggest a new attempt to move below the May lows.

DAX 40 chartSource: ProRealTime

S&P 500 stabilises above weekly low

After the bounce was rudely interrupted earlier in the week, the index slumped back to the 3860 low it has tested a week before.

This potential double-bottom could thus set up at least a near-term rebound. Admittedly the last bounce did not end well, fizzling out from the Wednesday high, but if the buyers can engineer a bounce that recovers 4100 perhaps a rally of sorts can be sustained.

Above 4100 the index will move on to 4300, the peak from the immediate post-Federal Reserve bounce. Whether it can keep going from there remains to be seen, given the ongoing pessimism around the global economy.

A fresh move to the downside would require the price to drop below 3960, negating the double bottom discussed above.

S&P 500 chartSource: ProRealTime
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European indices open higher after hefty declines last week

Trading outlook on FTSE 100, DAX 40, and Dow after last week’s sharp sell-offs.

indicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Monday 23 May 2022

FTSE 100 recovers from last week’s lows

The FTSE 100 opened up today and thus continues its recovery rally from last week’s 7,227 low, made close to the current May low at 7,157, amid volatile trading due to recession fears, a near 50-year low in UK unemployment data and the annual inflation rate rising to a 40-year high at 9% in April compared to 7% in March.

Last week’s high at 7,545 is back in the picture, a rise above which would target the 7,621 early May high. Above this level sits key resistance in the 7,657 to 7690 area which is made up of the January 2020, February, and April highs and as such is likely to cap. 

Support below the 55-day simple moving average (SMA) at 7,433 and the 2 May low at 7,390 is seen between the 11 May high and the 200-day SMA at 7,354 to 7,326.

Provided the current May trough at 7,157 isn’t slipped through, the bulls retain the upper hand.

FTSE 100 chartSource: ProRealTime

DAX 40 retests its downtrend line after volatile week

The DAX 40’s recovery rally from last week’s 13,685 low is set to continue ahead of today’s German Ifo Business Climate publication for May which is forecast to come in at 91.5 versus 91.8 in April.

This year’s downtrend line at 14,196 is likely to be breached today with last week’s high at 14,282 being back in sight. This should remain the case while the DAX stays above last week’s trough at 13,685 on a daily chart closing basis.

Together with the 14,315 early May high, the 14,282 level offers a resistance zone for the index, a rise above which would have clear bullish implications, however, targeting the 14,599 April high. For a longer-term bullish picture to emerge, a rise and daily chart close above the late April high at 14,599 needs to ensue.

Slips are likely to find support along the 55-day SMA at 14,056 with further support sitting between the mid-April low and Wednesday’s high at 13,882 to 13,875.

Further minor support can be found at the 13,807 2 May low and at the 13,538 April trough.

DAX 40 chartSource: ProRealTime

Dow tries to stabilise after dismal week

The Dow Jones Industrial Average fell to last week’s 30,637 low, the lowest level seen since March 2021 when the index formed an interim bottom at 30,545, as growth and inflation worries hit.

The index is expected to stabilise ahead of Tuesday’s US S&P Global manufacturing and services PMI data release for May, at least in the short-term, and try to revisit the February and March lows as well as its one-month downtrend line at 32,234 to 32,440 over the coming days, now that a “Hammer” has been formed on Friday’s daily candlestick chart, that is to say a bullish reversal candle.

While the Dow doesn’t manage to heave itself back above last week’s high at 32,756, though, the downtrend remains very much entrenched since a series of lower highs and lower lows can clearly be made out on the daily chart.

Failure at last week’s low at 30,637 would engage the 30,545 March 2021 low and most probably also the 38.2% Fibonacci retracement of the pandemic uptrend and pre-pandemic high at 29,800 to 29,568.

DJIA chartSource: ProRealTime
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Indices struggle as bullish sentiment fades

Hopes of further gains are weakening, as the bounce from Thursday’s low starts to run out of steam.

IndicesSource: Bloomberg
 
 Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 24 May 2022 

FTSE 100 bounce stalls

From Thursday’s low the index was able to bounce some 300 points, recovering 7500 briefly yesterday as global risk appetite rebounded for a second day.

This for now has averted the potential for a bigger pullback, although the broader macro environment still suggests that a risk-off mentality prevails among investors.

Hopes of a warming in relations between the US and China were raised yesterday when President Biden said he was considering easing tariffs on Beijing, helping to lift the FTSE 100’s mining sector.

However, the rebound yesterday carried the price to trendline resistance stretching back to the April high, which has so far managed to stymie rebounds since then. Lower highs have been created here several times, and if a full-blown reversal develops today then the bearish view remains and a move back towards 7200 could develop.

It will require a move back above 7550 to clear trendline resistance and the lower high from last week.

FTSE 100 chartSource: ProRealTime

DAX stuck below 50-day MA

Hopes of continued gains here were dealt a blow as the euro strengthened following European Central Bank (ECB) president Lagarde’s comments that the bank would look to raise interest rates out of negative territory. This bolstered the euro, and resulted in gains for European indices being trimmed. The turn lower for US markets overnight has taken the wind out the rebound.

The 50-day simple moving average (SMA) continues to act as resistance, and a reversal here would bring Thursday’s lows at 13,685 into view, and mark a resumption of the downward move in place since February.

Weakness over the past two days has dimmed the potential for a further bounce, but it will need to clear 14,270 to open the way to additional upside. This will also end the run of lower highs for now, another bullish development.

DAX chartSource: ProRealTime

S&P 500 heads lower

Monday’s bounce stalled after hours following results from Snap that disappointed investors and put pressure on the tech sector. Investors are now wondering whether this is a sustainable bounce or whether it will go the way of others and result in a fresh move to the downside that results in a test of the recent lows.

While arguably overstretched in the short-term to the downside, the index could see further declines, bringing 386 and 3692 into view once again.

Any sustained bounce needs to clear 4000 to open the way to additional upside.

S&P 500 chartSource: ProRealTime
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European and US indices mixed ahead of FOMC

Technical outlook on FTSE 100, DAX 40, and Nasdaq 100 ahead of today’s FOMC meeting.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Wednesday 25 May 2022 

FTSE 100 flirts with mid-May high

The FTSE 100 continues its recovery rally from last week’s 7,227 low, made close to the current May low at 7,157, and is revisiting its mid-May high at 7,545 after last week’s sharp declines triggered by recession fears and the annual inflation rate rising to a 40-year high at 9% in April compared to 7% in March.

A rise and daily chart close above last week’s high at 7,545 would engage the 7,621 early May high. Above this level key resistance remains to be seen in the 7,657 to 7690 area which consists of the January 2020, February, and April highs and as such is likely to cap.

Support comes in along the 55-day simple moving average (SMA) at 7,455 with further minor support being found at the 2 May low at 7,390 as well as between the 11 May high and the 200-day SMA at 7,354 to 7,330.

Provided the current May trough at 7,157 isn’t slipped through, a bullish bias remains in play.

FTSE 100 chartSource: ProRealTime

DAX 40 capped by 2022 downtrend line but nonetheless remains bid so far

The recovery rally in the DAX 40 from last week’s 13,685 low stalled at this year’s downtrend line with the index once more trading below the 55-day SMA at 14,098 after this morning’s German GfK consumer confidence data for June came in at a worse than expected -26.0 compared to a forecast -25.6 and revised -26.6 record low in May.

This year’s downtrend line at 14,185 is likely to be retested, however, provided that the DAX 40 remains above last week’s low at 13,685 on a daily chart closing basis. If so, the early May, this and last weeks' highs at 14,228 to 14,315 are expected to be revisited.

A rise and daily chart close above the 14,315 early May high would have medium-term bullish implications and would bring the 14,599 April high into view. For a longer-term bullish picture to emerge, a rise and daily chart close above the late April high at 14,599 needs to take place.

Slips below yesterday’s 13,907 low may find support between the mid-April low and the 11 May high at 13,882 to 13,875. Further minor support can be found at the 13,807 2 May low and at the 13,538 April trough.

DAX 40 chartSource: ProRealTime

Nasdaq 100 trying to level out ahead of FOMC minutes

The Nasdaq 100’s swift descent has so far taken it to a one-year low at 11,490 in the midst of soaring inflation, aggressive US rate hikes amid the possibility of a looming recession, and mainly disappointing earnings from its constituents.

The tech-heavy Nasdaq Composite fell 2.8% last week and this week has tried to level out ahead of today’s US Federal Open Market Committee (FOMC) meeting.

Since last week’s low at 11,490 has not been accompanied by a lower low on the daily Relative Strength Index (RSI), positive divergence can be made out on the daily chart. This often leads to at least a minor counter-trend move being seen.

Add to that yesterday’s “Hammer” formation on the daily candlestick chart, and there might be a glimmer of hope for the index with it possibly finding at least an interim low around current levels.

Therefore, from a technical perspective, as long as last week’s low at 11,490 isn’t slipped through, Friday’s high at 12,092 may be revisited.

Above this level the April-to-May downtrend line can be spotted at 12,385 and last week’s high at 12,588 as well as the breached February-to-early May support line, now - because of inverse polarity - resistance line, at 12,610 which is expected to cap, though.

Nasdaq 100 chartSource: ProRealTime
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European indices pause post Fed rate hike

Technical outlook on FTSE 100, DAX 40, and Dow following FOMC meeting.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Thursday 26 May 2022 

FTSE 100 struggles around mid-May high

The FTSE 100 is struggling to overcome its mid-May high at 7,545 after four consecutive daily gains as traders mull yesterday’s Federal Open Market Committee (FOMC) minutes.

A minor retracement back towards the 55-day simple moving average (SMA) at 7,461 may be witnessed as the index pauses its advance with further minor support being seen at the 2 May low at 7,390 as well as between the 11 May high and the 200-day SMA at 7,354 to 7,332.

A rise and daily chart close above this and last week's highs at 7,545 to 7,563 would lead to the 7,621 early May high being eyed next. Above this level key resistance remains to be seen in the 7,657 to 7,690 zone which consists of the January 2020, February, and April highs and as such is likely to cap.

FTSE 100 chartSource: ProRealTime

DAX 40 remains capped by 2022 downtrend line

The recovery rally in the DAX 40 from last week’s 13,685 low stalled at this year’s downtrend line with the index trading below the 55-day SMA at 14,102 since yesterday as the German GfK consumer confidence data for June came in at a worse than expected -26.0 compared to a revised -26.6 record low in May.

This year’s downtrend line at 14,160 is likely to be retested, however, provided that the DAX 40 remains above yesterday’s low at 13,869 during a quiet trading session today as much of catholic Europe celebrates Ascension Day.

If the downtrend were to be breached, this week’s high at 14,228 would also need to be exceeded for key resistance at the early and mid-May highs at 14,228 to 14,315 to be reached next.

An advance and daily chart close above the 14,315 early May high would have medium-term bullish implications and would bring the 14,599 April high into focus.

Slips below yesterday’s 13,869 low may find support at the 13,807 2 May low or at the much lower down 13,538 April trough.

DAX 40 chartSource: ProRealTime

Dow tries to break through its five-week downtrend line

The Dow Jones Industrial Average’s recovery rally from last week’s 30,637 low is trying to break through its five-week downtrend line at 32,025 whilst approaching the 32,234 February low, now that the US FOMC minutes have been published.

These did not state anything new and showed that most policy members judged that 50 basis point increases in the Federal Reserve funds target rate range would be appropriate for the next couple of meetings as they raised rates as expected by half a point to 0.75%-1%. This was the second consecutive rate hike and the largest increase in US borrowing costs since 2000.

Above the 32,234 to 32,340 February and March lows beckons last week’s high at 32,756 which needs to be exceeded for a lasting bullish reversal to take shape. Minor support below yesterday’s low at 31,728 can be spotted at Tuesday’s low at 31,361 as well as at the 31,227 12 May low.

Only failure at last week’s low at 30,637 would engage the 30,545 March 2021 low and most probably also the 38.2% Fibonacci retracement of the pandemic uptrend and pre-pandemic high at 29,800 to 29,568.

DJIA chartSource: ProRealTime
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Risk-on sentiment is back in play, pushing indices higher

Bullish technical outlook on FTSE 100, DAX 40 and Dow, now that bullish reversals signals have been triggered.

IndicesSource: Bloomberg
 
 Axel Rudolph | Market Analyst, London | Publication date: Monday 30 May 2022 

FTSE 100 tries to overcome its early May high

The FTSE 100 is trying to overcome its early May high at 7,621 and reach the late April high at 7,657 amid global risk-on sentiment due to hopes that the US Federal Reserve (Fed) may not need to tighten as much as previously feared following a further slowdown in core US PCE inflation and as China’s reopening plans spurred a rally.

A rise and daily chart close above the 7,657 21 April high would engage resistance seen between the 7,657 to 7,690 January 2020, February, and April 2021 highs which is expected to thwart the first attempt of a breakthrough during a curtailed week as the UK celebrates the Queen’s Platinum Jubilee with a long Bank Holiday weekend which begins on Thursday.

Above the 7,690 January 2020 peak lies the July 2019 high at 7,730.

Minor support is seen at the 7,545 mid-May high.

FTSE 100 chartSource: ProRealTime

DAX 40 trades near two-month highs

The recovery rally in the DAX 40 has taken it to levels last seen in early April, to above the 14,599 21 April high, in low volume, risk-on trading as many Europeans made a long weekend out of Thursday’s Ascension Day holiday.

The major 14,840 to 14,927 resistance zone is thus back in focus. It began as a key support area, made up of the May 2021 to February 2022 lows, before being slipped through when, due to inverse polarity, it changed to a major resistance zone and thwarted the steep March rally which provoked the sell-off to the May trough.

From there the current rally seems to be taking the DAX 40 back towards the 14,840 to 14,927 key resistance zone which is expected to cap when first tested.

Above it the 200-day simple moving average (SMA) can be seen at 15,096. Good support can now be found at previous resistance, namely between the early and mid-May highs at 14,315 to 14,282.

DAX 40 chartSource: ProRealTime

Dow finished the week on a positive note after a five-week slump

The Dow Jones Industrial Average’s recovery rally from its current May low at 30,637 low has taken it to above its two-month downtrend line and, more importantly, its mid-May high at 32,756 on Friday, thus leading to the first bullish week after five consecutive weeks of lower levels being seen.

The rally came amid risk-on sentiment as investors hope that the Fed may not need to tighten as aggressively as had previously been feared and on the back of a further slowdown in core US PCE inflation.

With today’s US cash markets being shut in the US due to Memorial Day, the index is looking for further gains on its electronic overnight session with the 55-day SMA at 33,624 being in focus, now that a bullish reversal has been formed after a bottoming formation.

Key resistance is made up of the 34,181 to 34,059 area which consists of the late February and early March as well as the early May highs. Support is now seen at the 32,756 mid-May high.

DJIA chartSource: ProRealTime
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