Levels to watch: FTSE, DAX and Dow

Global markets catch a bounce this morning, yet a short pullback seems likely in the near term.

Two women walking past charts displayed on a large monitor
Source: Bloomberg

FTSE begins to get a lift as resistance is broken

A support zone around 6430-6450 held strong yesterday and has led to a more bullish tone taking hold with the move above the intraday swing high of 6518. The move higher is likely to the index move back towards the week’s high of 6568. This level represents the 50% retracement, coupled with the resistance set by Monday’s highs and Friday’s lows. While I do believe there is a good chance we could see the price move back towards 6568, it is unlikely that this will happen in a straight line, and thus the likely near-term pullback would be looking towards the 6518 level as possible support. 

FTSE 100 chart

DAX moves higher, yet major resistance in place

The DAX has managed to catch a bounce higher overnight following the inability to create a new lower low later into the session. The price is currently attempting to break higher but has got a descending trendline and 10,856 fibonacci level to deal with. As such, I would not be surprised to see a short-term move lower, yet the break above yesterday’s peak shows that further gains could be on the cards. Nevertheless, while the price remain below 10,856, I remain bearish and will only expect further gains should we move above that level. 

DAX chart

Dow continues volatile environment and selling seems likely

We continue to trade within the range set earlier this week of 17,500-17,800. However, yesterday saw the Dow Jones price selloff at the major 17,686 level that has been crucial to price action over recent weeks. As such, the current bullish move higher this morning is likely to be sold into at either 17,686 or 17,800. I am looking for reversal signals around these levels. While I am bearish at these two levels, an ability to close above 17,686 on an intraday basis (one hour) would bring a likely move to 17,800 at which I would be bearish again.

Dow Jones chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts