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It is a key day for markets, thanks to the presence of US GDP and the latest Federal Reserve meeting on the calendar. A weak period for the US dollar has made life easier for US indices, but a reasonable print on US growth this afternoon could see the greenback wake up again and cause Wall Street to shed the ground gained in recent weeks.
Europe remains unable to mount a decent rally, while the FTSE is still stuck in the 100-point range that has plagued us for weeks.
FTSE dipped below 7000
Broadly I can still refer you to previous observations on the state of this index. Monday saw a move above 7100 that was reversed, while Tuesday was a mirror image, as a dip below 7000 brought out the buyers. Until this changes, there seems little point trying to second guess a market that seems to have no idea of its next move.
DAX could reach 12,000
Tuesday’s action swiftly reversed the bounce seen on Monday, carrying the index back to the 50-day SMA (11,800). A close below here would be the sign that more downside is on the way, which could potentially open the DAX to a rapid selloff towards the 100-day SMA at 11,000.
However there is still the possibility of yet another bounce off this indicator towards the 12,000 zone, which is now an area of significant resistance.
Dow awaits US data
While buyers are certainly to be found on any dips towards or below 18,000 as was the case yesterday, what is not evident is any desire to push the index much higher. With US GDP and the Fed on today’s schedule that is understandable, so the wisest course may be to await news and see whether, in the wake of this, the bulls can muster the strength to push the market beyond the zone around 18,180.