Article by IG Senior Market Analyst Axel Rudolph
FTSE 100, DAX 40, and S&P 500 Charts
FTSE 100 index Drowning in fears of rising interest rates
The FTSE 100 is fast approaching a March low of 7,204, trailing losses in Asia and on Wall Street as strong ADP jobs data in the US fueled expectations that the Federal Reserve (Fed) will raise interest rates further. Minor resistance can be found at 7,296 Dec low and also 7,331 March 24th low.
FTSE 100 daily price chart
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Dax 40 Falls through the main support
The DAX 40 has now fallen through its key support zone from April to July on the back of strong US jobs data and downwardly revised German manufacturing PMI indicating weakness in the economy. The fact that the daily chart closed below the support area of 16,625 to 15,710 from April to July took place is technically bearish as it indicates that an important top has now formed.
Below the early April low at 14481 lies the mid-January/late March high of 15305 to 15272 ahead of the 200-day simple moving average at 14948 which is now a medium term bearish target. Resistance at 15,625 to 15,710 is expected to thwart any bullish reversal attempt today.
DAX 40 daily price chart
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Standard & Poor’s 500 Slipping due to strong jobs data ahead of Nonfarm Payrolls
The S&P 500 fell to a one-week low of 4,384 as US non-farm payrolls data came in much stronger than expected at 497K vs. 226K expected in July, forcing the Fed to raise interest rates further, leading to a rise in Global returns while stocks were under pressure. The (redrawn) May-July support line at 4393 is likely to be revisited on Friday on the NFP release, which lies below Thursday’s low of 4389 and late June’s low of 4328. The daily chart close may indicate Closing below this level would form an important top.
Resistance can be found between Wednesday’s low and Thursday’s high at 4430 to 4434.