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Key index levels: technicals for FTSE, DAX and Dow

A look at where the main indices are currently trading.

FTSE heading towards 200-hour MA

Yesterday we highlighted that the FTSE 100 might find support towards 6776. At the time of writing the index is hovering just above this level, indicating that the tussle between bulls and bears is still a closely fought one. The failure to solidly revisit 6850 is a worrying sign for the optimists.

The losses seen yesterday and so far in today’s session have taken the FTSE out of overbought territory on a daily chart, and on an hourly basis it has probed oversold levels.

We are now heading towards the 200-hour moving average, which may provide support, while 6750 still remains the bottom end of the current range.

Dow could retest 16,000

The Dow Jones has held above yesterday’s lows around 16,370, and on a daily chart there appears to be strong support at 16,390 that may set the stage for another test of 16,600, the magic level that has acted as a stumbling block to upward progress.

A break of 16,390 would suggest that we are about to see yet another retest of 16,000, raising the possibility that the rangebound trading that has predominated since late February is likely to continue for the time being.

If we are able to rally from the current level then 16,550, the high from yesterday’s price action, is the first target to look out for, but the index has shown noted reluctance to go any higher from that point.

DAX touching 9400

The DAX still seems condemned to its Sisyphean labour of pushing towards 9650, only to see bullish sentiment fade and send the index back down to 9400.

This is the range that has prevailed from the latter half of April, and it seems that we will be heading back in that direction now that the index has touched 9400 in the early part of today’s session. Unlike on Monday, when a sharp drop took the index into oversold conditions, today we skirted oversold levels but didn’t venture into that area. So it appears, for the DAX at least, that the bulls have the advantage at the moment.

On a daily chart the 100-DMA has acted as a barrier to any further selling as well, but if we were to drop below 9400 then it would signal a return to mid-April lows around 9200.

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