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Levels to watch: FTSE, DAX and Dow

The FTSE is outperforming its peers as the DAX and Dow channel lower.

Two women walking past a display with multiple charts
Source: Bloomberg

FTSE continues to grind higher

Friday saw the FTSE pull back to Tuesday’s peak of 6710, with a subsequent bounce higher. We have now seen two weeks of gains and the uptrend is well established. As such, I remain bullish as long as the price is above 6710.

In the near term, we await a break above 6767, which would then likely lead to a move towards 6808, with 6767 then forming new support. However, until we see a move above 6767, we could see further consolidation between 6710 and 6767.

FTSE chart

DAX selloff comes under microscope today

The latter part of last week saw the price break out of the clear uptrend that has dominated markets since the 27 July low. However, with the DAX moving higher this morning, there is the possibility that we could see some form of resurgence. Ultimately I would need to see a move back above 11,584 to gain confidence that the bulls are going to come back into prominence. Until then, it is likely that we will see the price move lower yet again to continue this channeling we have seen.

The price is currently testing the 50-hour SMA, which has previously provided support and resistance. Thus, this indicator could be the spark needed to see sellers come back into play, otherwise a move above it would near enough take us to that magical 11,584 level. Should the sellers take hold yet again, I would expect a move back to the recent low of 11,480.

DAX chart

Dow selloff likely to continue

The Dow Jones looks very similar to the DAX. Both are channeling lower and are engaging with their 50-hour SMAs. Like the DAX, this also has a crucial level of resistance to watch for just above the 50-SMA, on this occasion 17,455. A move above this level would bring a new higher high, whereas a move lower from here would continue the lower lows and lower highs of the previous week. I favour the bearish outlook, as a continuation. However, a move above 17,455 and 17,465 would bring a little bit more of a neutral outlook. Should the sellers take hold yet again, I would look for a move back to the recent low of 17,280.

Dow Jones chart

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