DAX 40, FTSE 100 outlook:

• The FTSE 100 is trading higher ahead of the BoE (Bank of England) tariff decision
• Dow Jones Index (DJI) bullish move supported by tech earnings
• German Dax 40 Breaks Psychological Resistance But Fibonacci Limits Upward Movement

Revenue Season received mixed reactions like central banks intensify quantitative tightening measures through aggressive rate hikes, reducing consumers’ purchasing power. With rising food and energy prices persistently supporting high inflationGas shortages continue to threaten the Eurozone, offering bleak growth prospects.

Central Banks and Monetary Policy: How Central Bankers Set Policy

Although energy prices have fallen in recent weeks, Germany’s reliance on Russian gas and offer limited by North stream 1 (currently at 20% of normal capacity) remain a major concern.

As the war in Ukraine approaches six months, the energy crisis has been further exacerbated by intense heat waves across Europe that have made it more difficult to produce hydroelectric and nuclear power.

However, despite the intensification geopolitical risksthe Dax (Germany 40), FTSE (UK 100) and the Dow Jones index (Wall Street 30) are currently trading higher on the day, supported by second quarter earnings.

Dax 40 course

After temporarily falling to support, a rebound from 13,330 allowed bulls to drive prices higher, leading to the formation of a Doji candle on the daily chart.

With price rising above the key resistance level we watched yesterday (13,500), the Dax 40 continued to climb towards the next major resistance zone at 13,620 (the 23.6% Fibonacci of the 2011 – 2022 move). For the imminent move, support and resistance remains between 13,330 and 13,867 with a break on either side providing a potential catalyst for price action.

Dax 40 Daily Chart

Chart prepared by Tammy DaCosta using TradingView

FTSE 100 price

Ahead of the BoE (Bank of England) interest rate decision, the FTSE is trading higher, up around 0.86% for the day. With prices currently rising, a break of 7500 could see a retest of 7560 with the next layer of resistance at 7600.

DailyFX Economic Calendar

FTSE 100 daily chart

Chart prepared by Tammy DaCosta using TradingView

— Written by Tammy Da Costa, Analyst for DailyFX.com

Contact and follow Tammy on Twitter: @Tams707