DAX 40, DOW JONES, FTSE 100 Outlook: Talking Points, Analysis and Charts
- DAX 40: Market sentiment drags DAX lower
- FTSE 100: UK growth slumps, BOE comes into focus
- DOW JONES: US Inflation sparks sell-off, Fed Meeting eyed
DAX 40: Market Sentiment drags DAX further down
European Equities opened lower this morning with any hopes of plateauing inflation wildly off the mark. This follows the European Central Bank confirming late last week that it intends to hike interest rates by 25 basis points in July, with another rate increase expected in September.
Focus now shifts to the FOMC Economic projections and the Federal Reserve interest rate decisionthat is expected to take place on Wednesday. At the time of writing, the German DAX has declined by approximately 200 points since the start of the European Session.
DAX 40 One-Hour Chart- June 13,2022
As shown on the hourly chart above, the Dax has declined sharply since last week’s break of the Head and Shoulders pattern, declining 1000 points from 14480 to today’s lows of around 13430.
DAX 40 Daily Chart- June 13,2022
From a longer-term view,the Daily Chart shows the decline from the key psychological level of 15000 and is currently trading below trendline support (taken from the March low). If the downtrend remains intact, further downward pressure could see the 13270 level coming back into play, leaving the door open for the key psychological level of 13000.
FTSE 100:UK growth slumps, BOE comes into focus
The FTSE 100 has continued its decline from last week, posting its largest weekly fall in 3 months. With UK GDP (April) coming in below expectations, pressure may mount on the Bank of England to hike rates further as inflation jumped to a four-decade high of 9% in April. All eyes now shift to the Federal Reserve and the BOE (Bank of England) rate decisions on Wednesday and Thursday for further direction and policy statements.
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FTSE 100 Daily Charts- June 13,2022
Price Action on the FTSE remains below significant Daily resistance level around the 7600 area. We are currently testing our Trendline at 7314 with a break below opening-up further downside. Support levels can be found at the 7100 area and 6720 area, while resistance can be found at 7431 and 7570 areas.
DOW JONES: US Inflation sparks sell-off, Fed Meeting eyed
Following Friday’s US inflation print, Wall Street suffered its worst week since January and has continued to decline (falling approximately 2% in today’s trading session).
The yield on 10-year US Treasury notes hit 3.24%, the most since October 2018. Traders expect the Fed to tighten by 175bps by September, if that happens it will be the first time the Fed has taken such draconian steps since 1994.
Notable premarket movers, include Boeing and Goldman Sachs both of whom trade more than 5% down on the day.
DOW JONES Weekly Chart- June 13,2022
Technically we are seeing price in a support area currently around 30800. We have a descending Weekly trendline from 2022 highs around 36800 to the May low around 30600. A break below here could open-up further downside in prices which would coincide with the Fundamental outlook which is hinting at a further decline in indices.
Intraday resistance may be found at 30865, 30905 and 30950 respectively.
Written by: Zain Vawda, Market Writer for DailyFX.com
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.