Article by IG Senior Market Analyst Axel Rudolph
FTSE 100, DAX 40, Nikkei 225 Analysis and Charts
FTSE 100 tries to recover amid slightly better month-on-month GDP reading
The FTSE 100, which last week slid to the 200-day simple moving average (SMA) at 7,573 on a higher-than-expected US CPI inflation reading, still tries to recover amid quiet trading as the US is shut for Martin Luther King Jr. Day.
Resistance sits at Friday’s 7,657 high, a rise above which could lead to last Thursday’s 7,694 high being reached. Overall downside pressure is likely to remain prevalent while the 7,694 level isn’t overcome. Above it sits resistance between the September and December highs at 7,747 to 7,769.
A fall through Thursday’s 7,573 low would push the 55-day simple moving average (SMA) and October-to-January uptrend line at 7,554 to 7,551 to the fore.
FTSE 100 Daily Chart
See how changes in daily and weekly sentiment can affect the FTSE 100 outlook:
| Change in | Longs | Shorts | OI |
| Daily | 26% | -9% | 9% |
| Weekly | 60% | -34% | 3% |
DAX 40 remains bullish
The DAX 40 index continues to look bid as German wholesale prices come in at a weaker-than-expected -0.6% in December and as market participants look forward to German full-year GDP growth numbers and Eurozone industrial production.
The DAX 40’s initial rise above Friday’s 16,753 Harami high is positive, provided that the index remains above Friday’s 16,607 low as the US market is shut and trading is likely to see less than average volume on Monday. Below 16,607 lies the January support line at 16,556 and last week’s 16,535 low.
A rise above Monday’s intraday high at 16,792 would probably engage last week’s high at 16,841.
DAX 40 Daily Chart
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The Nikkei 225 breaches the 36,000 mark
The Nikkei 225 is on fire and has broken through the minor 36,000 barrier earlier this morning as it continues to surge towards the 40,000 mark ahead of Friday’s Japan inflation data. Immediate bullish pressure will remain in play while no slip through Monday’s intraday low at 35,552 is seen. Above it minor support sits at last week’s 35,813 high.
The next upside targets are the 37,000 level and the 38,957 October 1989 record peak.