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FTSE fails to break above 6680
Attempts to break and close above the 6680 level have once again been thwarted, as the selloff in US equities last Friday dampened investor sentiment this side of the pond. In addition, the unsurprising emergence of Ukraine/Russian worries has added to the woes. At time of writing, the FTSE 100 has seen a mere two equity risers in early trade.
We remain trapped in a range, with the 200-day moving average at 6620 coming in to provide support if the current decline continues. Below the marginally psychological support of 6600 lays the 6575 level.
The FTSE is currently testing the 6640 level, and there hasn’t been a close below this level since the beginning of the month, so we may have to prepare for some downside today.
RSI trending to the downside
A long legged doji followed by a bearish candle today does not bode well for the DAX. The trendline resistance from the highs of January is trapping price action so any fall below the 9540 level, particularly on a closing basis, could spell a retest of the 50-DMA at 9465. Below that lies a target of 9415.
Despite a failure to register an overbought signal last week, the daily relative strength index is trending to the downside and the breakage of the bullish channel from the March lows on the four-hour chart is pertinent.
Price action is testing the 200-hour MA and the RSI is very much oversold, so we may see a bounce from 9514.
Resistance on the intraday now comes from the 9630-40 region and any breach targets 9697.
Dow can’t sustain record high
A new intraday record high of 16,651, and the test of the key resistance formed from the 16,606 highs, could not be sustained by the Dow Jones. Profit-taking is a likely explanation, along with the fears of a tech bubble.
Prices are currently below the 16,400 level with support coming from the 100-period MA which coincides with the trendline support from the 5 February lows. The RSI on the same timeframe is looking a little oversold, likewise on the one-hour chart where the 200-period MA has failed to offer support.