Levels to watch: FTSE, DAX and Dow

After a substantial move higher in equity markets last week, indices have stumbled on the first day of the new one.

Trader watching data screens
Source: Bloomberg

FTSE 100 falters
Momentum to the upside on the FTSE has started to fade just shy of 5950, but after the sharp move higher at the end of last week this is not surprising. The rising trendline on the hourlychart could stem selling around 5850, or below this around 5820, at which point fresh buyers may enter on the dip. The next target above 5950 would be the peaks from 13 and 14 January at 6000, and then above this the index could go on as far as 6168.

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FTSE 100

DAX headed down
Those who missed the post-European Central Bank bounce barely had a chance to get on board during Friday’s session, but a move back down today, taking the index out of overbought territory, may provide the opportunity.

As with the FTSE, we are watching the hourly chart, with the area around 9630 possibly being the area where fresh bullish momentum may intervene. If the index continues downwards, then further support is possible around 9540 and then 9318.

A move through the overnight high above 9850 would signal that the index is moving back to 10,000 and possibly beyond, perhaps around 10,120. 

Dow looks to climb
US futures have emulated the trading in Europe thus far, faltering in the early part of the session. However, so long as they hold above 15,800 there is still reason to expect more upside.

Further rallies would target 16,215 and then 16,338, while the loss of 15,800 would suggest a move back to the lows of last week around 15,690 and then 15,570.

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