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Key levels: technicals for FTSE, DAX and Dow

Perspective on how systemic Ukraine’s economy is, along with news that Russian troops have been called back to base, has seen indices climb higher as a relief rally takes hold.

FTSE makes a comeback

The FTSE 100 has filled the gap from Friday’s close and now looks set to make an attack on the 6800 level. The buy-on-the-dips brigade has made something of a comeback and, while we remain above the 6772 level, we could see price action make a sustained move through this round number metric in the coming hours.

The 200-hour moving average resides at this juncture, however the one hour chart is looking slightly overbought in early trade. Resistance is also coming from the uptrend from the 3 February lows – we could be looking at a rangebound day unless another catalyst manifests itself. The key support remains at the 50-day moving average, which, though tested on the intraday yesterday, has held rather well. The 100-DMA provided the next support at 6671 which is also the 76.4% retracement from the May/June 2013 high lows.

The mining sector has a large weighting in the UK benchmark and it is distinctly out of favour this morning due to the pullback from four-month highs in gold prices and the worse-than-expected Fresnillo earnings.

DAX finds barrier to upside

The DAX found support at 9320 and the 100-DMA, and we are seeing a bounce higher in early trade. Resistance may now come from the 50-DMA at 9513, assuming price action can clamber through 9500. A push to the upside should initially target the 9592 level.

For now the 9460 and 38.2% retracement from the 6 February lows to 24 February highs remains a barrier to upside. Support in early trade is coming from the 9420 level. It is important to watch the lows of yesterday – any breach here is likely to see price action find its way towards 9300.

Dow fails to convince

The Dow Jones futures have also filled the gap from Friday’s close. While we have tested the 16,300 level pre-US open, we have failed to see a convincing move through it. The one-hour chart is showing itself to be a little overbought. Still, we are now through the 50-DMA, so any additional bidding upon the open could see a move towards Friday’s highs at 16,399.

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