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Levels to watch: FTSE, DAX and Dow

Indices see lower volatility and direction ahead of key FOMC decision.

A data board displaying stock prices
Source: Bloomberg

FTSE moving back to support level

The 6123-6200 range that was respected on Thursday and Friday appears to remain in place today with an early selloff pointing towards a move back to 6123. With the 50- and 100-SMA at the lower end of this range, it is worth noting those as further support levels for the index.

With the price breaking lower from the rising wedge (bearish formation), the overall picture is becoming more bearish unless the price moves back above 6295. However, for now I expect this range to hold with a close out of the 6123-6200 range to signify the breakout. A close below 6123 would point towards a move to 6070, whereas a close above 6200 would look towards 6260 and 6295.

FTSE 100 chart

DAX strength looking to be on the wane

The DAX strength that has been in place throughout the past three weeks appears to be showing signs of weakness. The previous bounces from candles with long lower shadows simply hasn’t happened on this occasion, and that is a worry.

The short-term descending channel appears to be holding for now, yet it is clear that the higher lows are now on the decline, and thus any spike higher is likely to peak out below 10,524. I am expecting the short-term descending channel to hold until we see a close outside of the boundaries. Any move outside the top of this channel would look towards 10,378 as the first port of call. Meanwhile, the next major support level to watch out for is 9960.

DAX chart

Dow continues to range pointing to near-term upside

The Dow Jones is moving higher this morning, in a move which looks to continue the range which exists roughly between 16,162 and 16,700. The stepped nature of this recent upside means that the index looks likely to attempt a move towards the 16,700 area in the coming days.

The 20-period SMA appears to be providing near-term support for now, and thus the current support level to watch today is around 16,386. This chart certainly looks a little healthier than the DAX and FTSE. For now I am bullish and expect a move back to 16,700, at which point the response would be crucial to future direction.

Dow Jones chart

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