Levels to watch: FTSE 100, DAX and Dow

The FTSE 100 is leading the decliners, with the DAX looking primed to start following its lead. Meanwhile, the Dow continues to grind higher.

World indices Source: Bloomberg

FTSE 100 sell-off continues

The FTSE 100 has dropped into a new lower low, providing another bearish signal for the index. The respect of the 76.4% Fibonacci retracement last week has marked the top for this market, with the price turning lower since.

We are now engaging with the 200-day simple moving average (SMA) on the four-hour chart, which could provide support for the near term. Thus, while we could see a short-term rebound, such a move would not negate the bearish outlook and instead provides a better selling opportunity. As such, further downside looks likely unless we break above the 6942 swing high.

FTSE 100 chart

FTSE 100 chart

DAX rolling over after recent consolidation

The DAX has been consolidating over the past week, with price ranging between 10,786 and 10,987. The ability to break out of this range is going to be key to where we go from here.

With the price having turned lower from below the 10,987 resistance level, a fall below 10,786 would signify a bearish shift that tallies up with the trend in play for the FTSE 100.

DAX chart

DAX chart

Dow continues to grind higher

The Dow Jones is the one market of the three which remains within a short-term uptrend, with the price setting marginally higher highs and lows. Given the marginal nature of those gains, it makes sense to look out for a downturn before long.

Despite that, further upside is still the likeliest eventuality right now unless we break below the nearest swing low of 23,726. Should that occur, the wider bearish trend would come back into play once more.

Dow Jones chart

Dow Jones chart


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