Levels to watch: FTSE, DAX and Dow

US markets continue to push higher, with the Dow Jones creating new highs once more. Meanwhile, both of this morning’s FTSE 100 and DAX rallies have question marks hanging over them.

Trader watching data screens
Source: Bloomberg

Will the FTSE rally falter once more?

The index is gaining ground this morning, following Friday’s deterioration. Since reaching the 7000 peak on Thursday, we have seen the index trending lower and until we break back above 6853, there is a distinct possibility that we are seeing a precursor to another leg lower.

As such, unless we break through 6853, a move lower seems a distinct possibility.

DAX approaching decisive resistance level

The DAX has rallied towards the all-important 10,807 resistance level this morning, following a pullback late last week. This resistance level is absolutely critical to confirm the bullish medium-term perspective. As such, the reaction to 10,807 will define the day and could set the index on its path for weeks to come.

A convincing four-hour close above 10,807 would bring about a strong likeliness of substantial gains for the index. Conversely, a bearish intraday reversal pattern could provide us with a significant pullback for the DAX.

Dow uptrend looks set to continue

The Dow Jones has been gaining ground since Wednesday’s lows, with a remarkably consistent trend coming into play. There is reason to believe the US economy will benefit disproportionately from a Trump presidency than the other markets, hence the current outperformance we are seeing.

As such, further gains seem likely, with an hourly close below 18,741 required to negate this current uptrend. 

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.