- DAX 40: DAX lower as German inflation rises
- FTSE 100: UK unemployment rate rises, BOE under pressure
- DOW JONES: US equities pare early gains while awaiting US PPI
DAX 40: DAX lower as German inflation rises
European Equities opened higher this morning providing markets with a smidge of hope. The rebound proved short lived however, as the DAX continued its decline as the European trading session gathered steam.
German consumer prices rose 0.9% on the month in May, data showed Tuesday, after a gain of 0.8% the previous month. The annual figure also climbed to 7.9%, from 7.4% in April, while the Zew Economic Sentiment Index also missed expectations posting a figure of -28 with consensus at -27.5. These numbers add weight to suggestions that the ECB has its work cut out controlling inflation in the Eurozone’s largest economy.
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DAX 40 Daily Chart- June 14,2022
Source: Tradingview
Technically the Dax has finally had a Daily candle close below trendline support (taken from March low). As we approach support at the 13270 area, any break of price below, further downward pressure could see the key psychological level of 13000 be tested and possibly breached.
Intraday support may be found at 13216 and 13050, while resistance may be offered at 13485 and 13590 areas.
| Change in | Longs | Shorts | OI |
| Daily | 14% | -13% | -7% |
| Weekly | -11% | -3% | -6% |
FTSE 100:UK unemployment rate rises, BOE under pressure
The FTSE 100 follows the DAX as it approaches a key support level. The pressure on the BOE (Bank of England) ratcheted up this morning as unemployment and earnings numbers missed estimates.
The unemployment rate rose to 3.8% in April as average earnings came in at 6.8% in April with consensus at 7.6%. All eyes will now be fixed on the BOE (Bank of England) rate decision on Thursday, with a 25 basis points hike expected.
Not many notable performers, however the financial sector posted limited gains with HSBC and Standard Chartered leading the way. Both stocks were up 2.3% during the European trading session.
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FTSE 100 Daily Charts- June 14,2022
Source: Tradingview
Price Action on the FTSE remains below significant Daily resistance level around the 7600 area. Yesterday’s Daily candle closed on trendline support around the 7300 area, and we are trading well below the 100-day SMA (simple moving average) at 7426.
The FTSE 100 declined approximately 130 points during the European session, posting a low around 7170 as it approaches a near term support area of 7125. If the downtrend remains intact, the door may be open for a retest of the key psychological level of 7000.
DOW JONES: US equities pare early gains while awaiting US PPI
US equities pared early session gains indicating that markets aren’t quite out of the woods following yesterdays sell-off fueled by more aggressive Federal Reserve interest-rate hikes.
US 10-year yields fell back from the highest in more than a decade while the dollar remains steady. Heading into Wednesday’s Fed meeting fears of stagflation are at the highest since 2008, while growth optimism is at a record low. US PPI factory-gate prices released at 12h30GMT indicated a rise of 0.8%MoM. Could such a print see the Fed raise rates at a quicker pace or begin with a 75 basis point hike on Wednesday?
Notable premarket movers include Boeing and Salesforce, posting 8,5% and 7% losses in the European trading session.
DOW JONES Daily Chart- June 14,2022
Source: Tradingview
Technically price is still resting at support on the Daily chart after yesterday’s indecisive candle stick close. We are trading well below the 100-day SMA at 33654, with a break below the support area at 30500 clearing the way for a test of the key 30000 level.
Intraday resistance may be found at 30945, while support rests at the 30500 area.
Written by: Zain Vawda, Market Writer for DailyFX.com
Contact and follow Zain on Twitter: @zvawda
