Dax, Dow and Nasdaq 100 in Strong Form Ahead of US inflation

Article by IG Chief Market Analyst Chris Beauchamp

Dow Jones, DAX 40, Nasdaq 100, Analysis and Charts

​​​Dax maintains upward move

​The index continued to push higher on Wednesday, helping to shrug off Tuesday’s indecisive session, though a fresh push to the previous highs still eludes it.

​However, further short-term gains above 16,800 will reinforce the short-term bullish view and see the 17,000 area tested once again. Above this, the index will sit at new record highs.

​A reversal back below 16,500 is needed to indicate that a deeper pullback is in play.

DAX 40 Daily Chart

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​Dow continues to climb

​A further strong day on Wednesday built on Monday’s rally, and now the index seems set to target new all-time highs.

​The risk, however, is that the US inflation report this afternoon is stronger than expected. Given the scale of the gains made since October, the index remains vulnerable to a medium-term pullback. Indeed, one might be viewed as healthy, providing some corrective action to an index that has barely stopped moving higher since the beginning of November.

​A reversal back below 37,200 would likely mark the catalyst for additional short-term downside.

DowJones Daily Chart

​ ​Nasdaq 100 rising ahead of inflation data

​This index finds itself on its way to the 17,000 level again, unless a bearish reaction to this afternoon’s CPI comes into play.​Above 17,000 will see the index back at record highs. Bullish momentum has reasserted itself this week, bringing an end to the early January pullback.

​A reversal and closeback below 16,100 would be needed to revive the short-term bearish view.

Nasdaq 100 Daily Chart