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S&P 500, DAX & FTSE - Outlook Shrouded in Uncertainty

Talking Points:

  • A few ‘high’ impact data events, S&P 500 short-term technical outlook murky
  • ECB meeting on Thursday key event for the DAX
  • UK GDP on Friday, FTSE will look to try and hold onto its recent gains

For the intermediate-term technical and fundamental outlook for equity markets, check out the recently released DailyFX Q2 Forecasts.

S&P 500

Looking ahead to the calendar next week there are a few nuggets of ‘high’ impact data. On Tuesday, we have Consumer Confidence, then on Thursday Durable Goods and the Trade Balance, and to finish the week on Friday we have the release of Q1 GDP figures. For estimates and release times, check out the economic calendar. There is always geopolitical headline risk to keep an eye on as well.

The S&P made an attempt to rally last week, but then turned lower to post a weekly reversal bar. This hints at further downside in the week ahead, but market conditions have been somewhat choppy since trading around the 200-day and February trend-line. On any move lower which develops keep an eye on how support holds up, it’s an important line-in-the-sand for the broader outlook. Looking higher, last week’s high at 2717 clocks in as resistance followed by the trend-line off the record high.

S&P 500: Daily

S&P 500, DAX & FTSE - Outlook Shrouded in Uncertainty

DAX

The key event of the week is the ECB meeting on Thursday, however; the outcome isn’t anticipated to cause much of a stir in the market with no expectations of the central bank making any moves or signaling such. As per usual, though, vigilance is prudent. Friday brings German unemployment data, but not likely to move the needle for the DAX. See the calendar for release details.

Last week, the DAX pushed a bit higher but found sellers just under the 200-day MA and failed to close above a swing-high created in February. Should we see more strength there is not only the 200-day, but sizable price resistance from 12745 up into the mid-12850s. It seems likely a stall and pullback could be in order. Outlook in the near-term, though, remains relatively uncertain at this juncture.

Check out this guide for 4 ideas on how to Build Confidence in Trading.

DAX: Daily

S&P 500, DAX & FTSE - Outlook Shrouded in Uncertainty

FTSE

Little data out of the UK next week of the meaningful variety, with the only major ‘high’ impact data release not slated until Friday via Q1 GDP.

The FTSE climbed above the important 7300-area we had focused in on as resistance. It was initially viewed as a potential spot for shorts, but momentum never turned lower. This has the 200-day at 7392 in sight, but without price levels in confluence it is unclear how meaningful it will be. Attention will be on any pullback which may test former resistance now support. As is the general case with global equity indices, outlook is a bit murky at the moment.

FTSE: Daily

S&P 500, DAX & FTSE - Outlook Shrouded in Uncertainty

---Written by Paul Robinson, Market Analyst

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