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Indices stay under pressure as UK inflation remains sticky


Article written by IG Senior Market Analyst Axel Rudolph

FTSE 100, DAX 40, and S&P 500 Analysis, Prices, and Charts

​​​FTSE 100 drops on higher-then-expected CPI

​The FTSE 100 has been declining since Friday’s five-week high and is being pushed lower as UK CPI comes in higher-than-expected ahead of Thursday’s Bank of England monetary policy meeting at which the central bank is expected to hike its rates for a thirteenth time, probably to 4.75%.

​The index is now pressing on the 200-day simple moving average (SMA) at 7,551 and the early June low at 7,546, a fall through which would open the way for the 1 June high at 7,510 to be reached ahead of the May trough at 7,433. ​Downside pressure should retain the upper hand while Monday’s low at 7,581 isn’t bettered. Further resistance can be seen along the breached May-to-June uptrend line at 7,630 which, because of inverse polarity, could act as resistance.

FTSE 100 Daily Price Chart – June 21, 2023

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​DAX 40 sees two consecutive days of lower prices

​The DAX 40 has come off Friday’s new all-time record high as investors re-assess the economic outlook and future central bank policy.

​A slip through Tuesday’s low at 16,067 would put the minor psychological 16,000 level back on the cards, together with the 55-day simple moving average (SMA) at 15,941. ​Minor resistance above last Thursday’s low at 16,160 sits at Monday’s low at 16,187 with further resistance seen along the breached May-to-June uptrend line at 16,252.

DAX 40 Daily Price Chart – June 21, 2023

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​S&P 500 subdued ahead of Powell testimony

​​The S&P 500 is seen coming off its 14-month high at 4,447 ahead of Jerome Powell’s US Senate banking committee testimony on Wednesday and Thursday which is likely to re-iterate the Federal Reserve’s (Fed) hawkish stance. ​With the index having slid through its June uptrend line at 4,410, a short-term downside bias is in place. Failure at Tuesday’s low of 4,367 would put last Thursday’s low at 4,348 on the map.

​​Minor resistance is to be found around the minor psychological 4,400 mark and at Tuesday’s high at 4,405.

S&P 500 Daily Price Chart – June 21, 2023

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