Levels to watch: FTSE, DAX and Dow

Despite recent moves higher, there is reason to believe we will see another move lower for the indices in a bid to mimic the weakness we saw earlier in the week.

Data on screen
Source: Bloomberg

FTSE trading within triangle pattern

The FTSE 100 has once more rallied into the trendline and 50-hour simple moving average resistance area. The index is clearly trading in a symmetrical triangle pattern and as such, it makes sense awaiting a breakout for a directional trade. As such, an hourly close below 6847 would point towards another leg lower.

Alternately, an hourly close above 6881 would provide a more bullish outlook, with 6900 and 6919 the next important resistance levels. Until that happens, scalpers will likely seek to trade this formation with momentum indicators such as the stochastic for help on reversals. 

DAX tumbles once more

The DAX returned to the head and shoulders neckline of 10,629 yet again this morning, with the index selling off as a result. This provides a continuation of the recent bearish view, with 10,513 the next key hurdle to watch out for. Should we see an hourly close below 10,550, it would be a strong indicator that we are going to see another move lower and through 10,513 soon.

However, be aware that the 10,481-10,532 zone represents a major area of support and as such will be a significant hurdle to overcome. Should that occur, then a deeper pullback towards 10,366 or 10,261 would be likely. Conversely, a convincing hourly close above 10,629 would negate this bearish short-term view.

Dow to turn lower once more

The Dow Jones has been consolidating over the past 24 hours, following a 61.8% retracement of the downturn seen earlier in the week. On an intraday basis, we are seeing the top of this consolidation round off, with the stochastic highlighting that momentum may be on the turn once more.

As such, the Dow look likely to turn lower once more for a move into 18,533 and 18,469 support. This would form a bearish head and shoulders pattern should it come to fruition. This bearish view would be negated with an hourly close above 18,669. 

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