Levels to watch: FTSE, DAX and Dow

A mixed picture, with the FTSE 100 looking to sell-off from its range top once more. However, the DAX and Dow have begun to show signs of resurgence and thus we await a directional signal across these markets.

US traders
Source: Bloomberg

FTSE back at range top
The index did see a break-lower from the top end of its 6200-6220 range overnight, albeit after a brief foray above the zone. This highlights the importance of awaiting closed candles to signal a breakout.

However, we have seen another solid start to European trading today, with the index heading north towards the top of the range once more. Until we see an hourly close above the top of the range, prices around this area will be perceived as toppy and will therefore be holding a bearish view.

This is coming through now as the index is beginning to turn lower. Support levels of note are at 6169, 6163 and 6140. Resistance levels to watch are 6220 and 6230.

DAX rally called into question
The index has enjoyed somewhat of a resurgence over the past two trading days, creating higher-lows and highs. However, this necessitates a break through yesterday’s high of 9754 to continue the trend.

Given the toppy FTSE levels, there is a risk we could not see that new DAX high created and thus we are in a wait and see moment, where a break through 9754 continues the uptrend. Conversely, a move through 9624 would negate this trend and point towards a continuation of the losses seen so far this month.

Dow sell-off finds support
The index fell sharply overnight, following a disappointing start to earnings season. Interestingly, the index broke to a new intraday high prior to that sell-off and seems to have found support at 17526, which means we have now seen a higher-low created.

Given this potential trend shift, with a higher-low and high, there is a chance we could see the index break higher once more today. In which case, resistance levels of 17600 and 17733 come into play.

However, should we see an hourly close below 17500, this would point towards a continuation of the weakness we have seen in early April so far

This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Find articles by analysts