Levels to watch: FTSE, DAX and Dow

Indices grind lower following a strong end to last week, yet bullish sentiment remains.

Two people stood behind a chart display
Source: Bloomberg

FTSE pulls back after surge higher

The FTSE has been moving lower following a rise to the upside late last week. The creation of a new lower high, followed by a break of the low pointed towards a more protracted selloff. However, while further downside seems possible, I would need to see a move below 6400 to gain confidence that this is anything other than a short-term retracement.

The Bollinger band has been touched this hour and thus we could see the price react to that level. However, for now, I see this as a short-term retracement as long as the price remains above 6400.

FTSE 100 chart

DAX consolidates after last week’s spike

Last week saw the DAX move sharply higher following Thursday’s European Central Bank meeting. This morning has seen the price drift lower, in a move which bears a striking similarity to the same overnight move on Friday morning. As such, I see this as a short-term retracement and will thus be looking for another leg higher in the coming hours. The safest way to say we are truly on the pathway to another move higher is a break back above 10,856 (Friday’s peak).

DAX chart

Dow eases at 17,686 resistance

A similar story for the Dow Jones, which has drifted lower this morning, following a strong end to last week. Much like the other indices, this looks temporary to me, and in particular it still looks bullish if the price remains above 17,550. Again, the safest indicator to say that we are set for another move higher would be a break back above 17,686, and until we see a move below 17,550 or above 17,686, I await a breakout.

Dow Jones chart

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