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Key index levels: technicals for FTSE, DAX and Dow

With the European holiday today, we may have to get used to the idea that trade volumes will be on the low side.

Traders working at the New York stock exchange
Source: Bloomberg

Nevertheless, the news that Chinese exports grew in May should be a boon for the FTSE and at the very least keep it above some key support levels.

Questions abound for now as to whether the low volatility environment is a sign that we are on the cusp of high volatility, and that should invite an element of caution into this market.

FTSE struggling to move past 6870 

As it stands, the UK benchmark has struggled to gain traction above the 6870 level so we may see the market slip back to the bottom of the short-term range around the 6845 metric.

Two levels of support come in below this, the 6800 and the 6770. A break above the recent highs of 6894 would help to put some additional upside momentum in the FTSE, and could set it on a route towards the all-time highs of 6930.

DAX hovering around 10,000

Having closed at 9987 on Friday, the DAX is trading around the 10,000 marker this morning and again we are seeing the daily relative strength index register as slightly overbought. Buying support should come in the top of the previous range – around 9875-80 which coincides with the rising support from the 4 June lows.

Any moves through the 10,015 level, especially on a closing basis could target 10,088 in the near term. A decline through the 9893 level may see a return to the 9840 level.

Dow could break through 16,951

The Dow Jones saw a stellar upside day on Friday and the RSI is reflecting that level of exuberance. Price action is flat on last week’s closing level but should we see a break through the 16,951 level, there may be room for the index to challenge the 17,000 level and indeed possibly extend through it towards the top of the bullish channel which has been in evidence since the November 2012 lows.

The one-hour chart shows that the market may be losing some steam in the near term, so a return to 16,900 cannot be ruled out with 16,850-60 coming in below that.

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