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Levels to watch: FTSE, DAX and Dow

Indices are continuing their indecisive pattern, with as yet no clear indication of where they will move next. 

A man looking at charts and data on a screen
Source: Bloomberg

FTSE's momentum waning

It is hard to shake off the impression that the FTSE 100 has run out of bullish momentum. As Josh noted yesterday, 6808 has proven to be a stumbling block, and I would say that the 50-day SMA (6803) has now also come into play to prevent further upside. As before, we watch for a move above this zone and towards the area around 6850, which would go some way to restoring the bullish outlook.

Downside moves should head towards support at the 200-day SMA (6753), followed on by the 6720 area. For now, evidence is evenly poised for both the bullish and bearish case, which suggests that a wait and see approach would be prudent. 

FTSE 100 chart

DAX could see a pull back

For yet another day the 11,800 level remains elusive. While still in a long-term uptrend the fading euphoria from a Greek deal (such as it was) means that the index is looking vulnerable to a swift pullback. In that case, I would look to the 100-day SMA (11,605), and then the 50-day (11,377) as support areas, although I would wait until stochastics have turned bearish before I contemplated taking a short position. 

DAX chart

Dow Jones eyes close above 18,100

The same story is evident here as well – a failure over multiple sessions to sustain the sequence of higher highs. A close above 18,100 is required to reinvigorate the uptrend, which would then allow the index to contemplate a move towards 18,200 and then the all-time highs from mid-May. As with the DAX, bears would be best served by waiting for stochastics to turn negative, ideally accompanied by a close back below 18,000.  

Dow Jones chart

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