CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money. CFDs are complex instruments. You can lose your money rapidly due to leverage. Please ensure you understand how this product works and whether you can afford to take the high risk of losing money.

European indices little changed ahead of US Fed rate decision

Trading outlook on FTSE 100, DAX 40 and Nasdaq 100 ahead of today’s anticipated 50 basis point US Fed rate hike.

​FTSE 100 flirts with late April high

The FTSE 100’s recovery rally from its 7,299 late April low, made close to the 200-day simple moving average (SMA) and seen amid concerns over rapid rate hikes and weaker global growth, is taking it back towards the late April high at 7,582 ahead of Thursday’s Bank of England (BoE) rate decision.

Above the 7,582 high beckons key resistance in the 7,657 to 7690 region which comprises the January 2020, February and April highs and as such is likely to cap for the time being.

Minor support below the 55-day SMA at 7440 can be spotted along the two-month support line and at this week’s low at 7,390 to 7,387 with further support being found between the 200-day SMA and the late April low at 7,309 to 7,299.

Only currently unexpected failure at 7,299 would push the 50% retracement of the March-to-April advance at 7,218, and perhaps also the February low at 7,177, to the fore.

DAX 40 trying to retain short-term positive momentum

The DAX 40’s recovery from its 13,538 late April low, helped by improved US earnings, has been struggling below the 55-day SMA at 14,179 ahead of today’s anticipated 50 basis point rate hike by the US Federal Reserve (Fed).

For a bullish picture to emerge, a rise and daily chart close above last week’s high at 14,190 will need to be seen. If so, the 2022 downtrend line at 14,389 will be back in the picture. Slips should find support around this week’s low at 13,807 and along the two-month support line at 13,718.

Only a drop through the recent low at 13,538 would put the 61.8% Fibonacci retracement of the March advance at 13,385, as well as the 11 March low at 13,277 back on the map.

Nasdaq 100 awaits FOMC rate decision

The Nasdaq 100’s swift descent has so far taken it to its 12,710 one-year low amid soaring inflation, a looming recession and mainly disappointing earnings from its constituents.

The index is attempting to hold above this year’s low at 12,710 while awaiting today’s US Federal Reserve rate decision with a 50 basis point increase priced in by the market but a 75 basis point rise not being excluded by some.

From a technical perspective the 13,106 to 12,945 February and March lows, together with the late April and this week’s lows at 12,805 to 12,710, remain key for the ensuing trend. A drop below the low at 12,710 would target the August and October 2020 highs and March 2021 low at 12,466 to 12,212.

For any kind of recovery to gain traction, a rise and daily chart close above last week’s highs at 13,542 to 13,582 would need to occur.

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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