Levels to watch: FTSE, DAX and Dow

Following a v-shaped move in global stock markets, we are seeing a move lower once more this morning. Given the current volatility, will we see a full recovery or could things get worse before they get better?

Traders on the NYSE
Source: Bloomberg

FTSE turning lower, but for how long?

The FTSE managed to regain some ground yesterday, following Friday’s sharp sell-off. It is difficult to know whether we are seeing a retracement before another push back above 6771, or else a push back below 6654. Should the latter occur, it would have significant bearish consequences for the index.

For now, the short-term downtrend looks likely to persist, yet with Fibonacci support impending (6698, 6689 and 6681), any bulls may see those as an opportunity to get long. Ultimately the directional bias will be determined by whether we see price break through 6771 or 6654.

DAX selling-off from trendline resistance

The DAX has also seen its rally come undone, with price turning lower from trendline resistance overnight. We clearly have two key support levels at 10,481 and 10,388 up ahead which are accompanied by the 50% and 70% ratios.

For now, further downside seems likely, with a bullish outlook only coming should we see an hourly close back above 10,556.

Dow turns lower after sharp rally

The Dow Jones is in a similar position to the DAX, with price having rallied into trendline resistance, only to start selling-off once more. The stochastic is turning lower and this could be a sign momentum is on the wane.

It seems likely there is more left in the tank for a downside move and we would need to post an hourly close back above 18,365 to negate this recent downtrend.

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