Levels to watch: FTSE 100, DAX and Dow

The 76.4% Fibonacci resistance level has the potential to impact global markets. While the FTSE 100 looks to have reversed from this level, the DAX and Dow could see today’s price action dictated by that Fibonacci level.

FTSE 100 breaks below critical support level

The FTSE 100 has broken below the crucial 6798 support level this morning, completing a double top formation for the index.

Interestingly, the 76.4% retracement level at 7002 has provided the top for that pattern, and thus it looks as if we are set for another leg lower for the index. A break up through that 7002 level would point towards a resurgence, yet until then the index looks set for further downside to come.

FTSE 100 chart

FTSE 100 chart

DAX rallies into 76.4% retracement resistance

The DAX has similarly been respecting the 76.4% Fibonacci resistance level, yet unlike the FTSE 100 we are seeing the current price testing that resistance once more. The short-term uptrend points towards the possibility of further gains, particularly if we clear through the prior high of 11,282.

However, the level to watch out for is 11,571, where a break above there would have significant bullish consequences for the index. Alternately, watch for a break below 11,006 to signal a bearish phase coming into play once more.

DAX chart

DAX chart

Dow pushing towards crucial Fibonacci resistance

The Dow Jones is another market which could see the 76.4% Fibonacci resistance level come into play, with the index continuing to grind higher towards that 25,002 level. A break through the 26,072 level would be needed to signal an end to the wider downtrend.

However, with a clear uptrend in play over the intraday/short-term, we would need a break below the 24,244 level to bring about a renewed bearish outlook. Until then, the short-term uptrend remains intact.

Dow Jones chart

Dow Jones chart


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