Indices Little-Changed After Post-US CPI Volatility​​​​

Article by IG Chief Market Analyst Chris Beauchamp

FTSE 100, DAX 40, Dow Jones Charts and Analysis

​​​FTSE 100 aiming to move above 7600

​The index managed to push its way above 7600 yesterday but was unable to hold these gains. ​A reversal below 7540 and the 50-day SMA would be a bearish development and signal that the sellers were in control once more. This might then open the way to a move to the lows of July around 7250.

​A close above 7600 would mark a more bullish event and then allow the price to contemplate a renewed move to 7700. This is where the July rally stalled, so a close above this level would add to the bullish view.

FTSE 100 Daily Chart

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​Dax moves back above 100-day MA

​European indices had gained in the wake of the US CPI reading, but then failed to hold their gains. The Dax succeeded in reaching the 50-day SMA again but then fell back. Early trading this morning has seen the index drop back slightly. Further losses would suggest a retest of 15,700, and then down to 15,500 and the July low.

​As throughout the past week, bulls will need a close above 16,000 to provide the necessary catalyst for a new move back to the record highs seen in July.

DAX 40 Daily Chart

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​Dow attempting to move higher again

​The Dow suffered a notable intraday reversal yesterday, after attempting to rally above 35,500 following the inflation reading. ​For the current weakness to turn into even a modest pullback to the 50-day SMA, the 35,060 level needs to be broken on a daily closing basis. This might then see further losses toward the June resistance level of 34,506.

​For the moment, however, price action still looks like consolidation, and continued activity above 35,000 will bolster bullish hopes that a new move higher can develop.

Dow Jones Daily Chart