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Better US earnings lift European indices

Technical outlook on FTSE 100, CAC 40 after yesterday’s French election television debate, and S&P 500, all of which continue to advance.

​FTSE 100 continues to gradually advance

The gradual rise in the FTSE 100 is ongoing despite worries about soaring inflation, central bank tightening and rising bond yields.

The early April high at 7,671 is now within reach, a rise above which would target the January 2020 and February 2022 highs at 7,688 to 7,690. Were this resistance zone to be bettered, the July 2019 high at 7,730 would be targeted next.

Minor support comes in at Tuesday’s 7,566 low with further support seen in the 7,536 to 7,522 zone which incorporates the 23 March high and 4 to 12 April lows.

Further down meanders the 55-day simple moving average (SMA) at 7,459.

CAC 40 continues to rise after French presidential election television debate

The CAC 40’s ascent, which began last week from slightly above the 6,421 to 6,378 support zone, continues after yesterday’s French presidential election television debate between the incumbent, Emmanuel Macron and his right-wing rival, Marine Le Pen.

According to market research company IPSOS, a poll taken just before the debate gave President Macron a lead of around 13 points with a projected 56.5% of the vote. The outcome of the debate is not expected to have altered this projection much.

The CAC 40 has now risen above the 55-day SMA at 6,630 and is about to hit a two-month resistance line at 6,664 today with the 16 and 23 March highs at 6,681 to 6,702 representing additional upside targets. Ultimately the 200-day SMA and the March peak at 6,783 to 6,831 should be reached as long as no slip through the 6,421 to 6,378 support zone ensues.

Minor support above this area can be found along the two-month support line at 6,544 and also at Tuesday’s 6,493 low.

S&P 500 approaches the 200-day SMA at 4,500

The S&P 500’s recovery from last week’s low at 6,367, made close to the 50% retracement of the February-to-March advance at 4,373 amid worries of an aggressively tightening US monetary policy and soaring Treasury yields, is ongoing with the 200-day SMA at 4,500 within reach now that US yields are softening.

The next upside target is the 8 April high at 4,525, above which the 10 January low, early February and 5 April highs can be spotted at 4,581 to 4,595. Support below the 6 April low at 4,450 comes in along the 55-day SMA at 4,419.

Only a currently unexpected fall and daily chart close below last week’s low at 4,367 would negate the once more bullish bias.

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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