Levels to watch: FTSE, DAX and S&P 500

A swift dip yesterday following oil inventory figures has been countered by overnight buying, indicating how conflicted investors are ahead of Friday’s jobs report.

Trader in a US stock exchange
Source: Bloomberg

FTSE 100 supported by 6760

Yesterday’s sharp dip following oil inventories probed new lows below those seen last week, but a recovery overnight confirms the area down to 6760 remains a significant area of support.

The price has pushed back above 6800 but is now stuck below the 200-hour simple moving average (6825), with a daily close above 6850 really needed to suggest resurgent bullish momentum.

The hourly stochastic is now overbought, so this could be another selling opportunity, with a view to the price heading back to 6760 and potentially lower.

DAX in the balance

Here too some of yesterday’s losses have been clawed back, with the outlook arguably neutral at present. Further moves back towards Tuesday’s high just below 10,700 would indicate the buyers are back in control, while a drop below 10,600 would seem to suggest fresh selling is the order of the day.

A bigger move lower would put the index back on course for 10,450. Bulls can take heart from the fact the index yesterday dropped back to test the top line of the previous descending channel, and then bounced. 

S&P 500 remains range-bound

It has been tough being a bear on US markets over the past month, although buyers haven’t exactly had a great month either. The relentless chop ahead of this week’s jobs report is just a continuation of the entire month’s range-bound trading.

Once again a dip yesterday towards 2160 brought out fresh buying, exactly as happened last week. The bounce puts the index back on course to test resistance at 2185, with 2193 above this.

At least this provides a good range to trade, with the observation that we are awaiting a break of either 2160 or 2195 to indicate the next direction of the broader market. 

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