​​​FTSE 100, DAX 40 and S&P 500 Drop as no US Debt Ceiling Agreement is Signed​​​

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

Article written by IG Senior Market Analyst Axel Rudolph

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​​​FTSE 100 drops on US debt ceiling woes and higher-than-expected UK CPI

​The FTSE 100 is seen slipping back towards the early and mid-May lows at 7,689 to 7,679 amid ongoing US debt ceiling negotiations and higher-than-expected UK CPI. This area may offer support on Wednesday.

​UK CPI fell less than expected to 8.7% year-on-year (versus an expected 8.2%) due to a sharp slowdown in energy prices. Despite it being the lowest reading since March 2022, it came in above expectations as food prices remain high. Core CPI rose to 6.8% YoY from 6.2% and monthly CPI by 1.2% versus a forecast 0.8%.

​Were a daily chart close below 7,679 to be made, the early April low at 7,627 may be reached, below which lies the 22 March high at 7,587.

​Minor resistance above the 55-day simple moving average (SMA) at 7,713 comes in at Monday’s 7,750 low.

FTSE 100 Daily Price Chart – May 24, 2023

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​DAX 40 comes off its all-time record highs on US debt ceiling worries

​The DAX 40 is swiftly coming off last week’s 16,333 all-time record high as ongoing US debt ceiling negotiations dampen investor mood.

​The March-to-My uptrend line at 16,015 is being revisited, below which the early to mid-May highs at 16,009 to 16,005, together with the psychological 16,000 mark may offer support. Further down the mid-April-to-mid-May sideways trading zone around 15,900 may also offer support.

​Minor resistance above Wednesday’s intraday high at 16,099 comes in around the 16,200 region.

DAX 40 Daily Price Chart – May 23, 2023

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S&P 500 swiftly comes off its nine-month highs on stalled US debt negotiations

​Last week the S&P 500 managed to rise above its 4,195 February peak to a nine-month high at 4,214 on hopes of a US debt ceiling rise being agreed. These have been thwarted on Tuesday when no agreement could be reached for now ahead of the 1 June deadline when the US would default.

​Risk-off sentiment led to the March-to-May uptrend line at 4,136 being retested, a slip and daily chart close below which would engage the mid-May lows at 4,099. Further down the 55-day simple moving average (SMA) at 4,076 may offer additional support.

​Minor resistance can now be found around the 10 May high at 4,158 and at the next higher 4,187 early May high.

S&P 500 DAily Price Chart – May 24, 2023

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