Levels to watch: FTSE, DAX and Dow

Indices pull back following yesterday’s FOMC meeting, yet structurally still look fine for further gains.

Trader looking at data boards showing charts
Source: Bloomberg

FTSE rallying back towards 6000
The FTSE saw a strong move higher yesterday, followed by a sharp decline at the release of the FOMC decision and statement. A typical ‘buy the rumour, sell the fact’ move. This morning is seeing a calmer climb higher, as the index attempts to regain the ground made up yesterday.

Crucially, we have seen a gradual stepped move higher today and this looks likely to continue. Much like the retracement lower this morning, it would not be surprising to see a gradual drift lower at some point, followed by a spike through the peak of this current move higher.

Thus a bullish short-term view is in play unless we see an hourly close below 5933. Resistance levels of note are 6000, 6024 and 6070. A close below 5933 would bring 5916, 5902 and 5878 support levels into play.

DAX diamond points to indecision
The DAX has been forming a diamond pattern over the past three trading days, highlighting the fact that while highs were created yesterday, so were new lows. As such, there is a more inconsistent move in play here.

Given the fact the wider move over the past week has been a clear uptrend, a bullish view remains for the time being, with a closed hourly candle below 9759 negating that view. Important levels that have to be taken out to give greater confidence in this move higher are 9875 and 9928. 

Dow bounces from trendline support
The Dow Jones suffered more than most yesterday, falling back over 300 points from its high. However, we have seen a nice bounce from trendline support and are clearly attempting to regain ground as we speak.

Much like the FTSE, this looks likely to see a gradual stepped move higher and thus any pullback is seen as a buying opportunity. This bullish view is held unless we see an hourly close below 15,928.

Key resistance levels in view are 16,097, 16,179 and 16,230, with a close below 15,928 looking towards 15,903, 15,849 and 15,725 as next support levels. 

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