Levels to watch: FTSE, DAX and Dow

Indices continue to claw back losses, bouncing off key support after days of heavy losses.

Data chart
Source: Bloomberg

FTSE 100 finally bounces
A bounce is finally being seen in London this morning, although it is small beer compared to the losses of the last four sessions. The market held above 5850 and has pushed on above 5900, confirming that the support zone of the August, September and December lows is still intact.

A look at the hourly chart shows the index could go all the way back to 6100 and still be constrained by the descending trendline off the late December highs. Nonetheless, a failure to hold above 6050 would suggest that the sellers are still in the driving seat.

DAX looks upwards
The index is challenging the highs of yesterday’s session just below 10,040, with a move above here pushing towards 10,109 and then 10,383.

So long as it holds below 10,200, it would seem the downtrend is intact. A push above 10,300 would suggest a bounce is in progress, while a drop through 9800 would certainly point to a test of the lows of September in the direction of 9500.

Dow could turn lower once more
Yesterday we saw 16,500 acting as strong support, stemming further losses, with futures pushing onwards. The first area to watch is 16,800, the highs of yesterday’s session, but it will take a move through 17,000 to suggest the opening pullback of 2016 is done.

A failure to push on towards this point, or even towards 16,900 points towards a turn lower and a fresh test of 16,500. If this is broken we look towards 16,142 and then 16,000. 

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