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

After the turn lower yesterday the sellers remain in charge, with a dismal end to the week in sight for equity markets. 

Source: Bloomberg

FTSE 100 could see 6940

The week started out with such high hopes for the index, but bullish momentum has faded, with yesterday’s bounce to 6880 petering out after the European Central Bank meeting and its associated disappointment. Throughout the week 6820 held as support, so a push through here would signal sustained weakness is on its way, perhaps down to 6780 in the first instance and then the 1 September low at 6720.

Any bounce would need to clear the 6880-6900 zone, to put the index back on course for 6940 and higher.

DAX held above 10,600

Eurozone indices are in a definite funk this morning, having fallen sharply in the wake of the ECB meeting. Yesterday the DAX held stubbornly above 10,600, but this dip was not followed through with fresh buying, and instead it looks like we will see a continued push lower, down through 10,600 and on to the lows of 1-2 September at 10,500.

Any rally would encounter resistance at the week’s highs around 10,750, with the August peak at 10,800 just above this.

S&P 500 could drop back to 2175

The hoped-for breakout in US markets has not materialised, instead we have a dip back to the 2175 support level from earlier in the week.

The 2165 level and then 2160 are the next areas to watch on the downside, while above this 2190 and then the all-time high around 2195 come into play.

With the index heavily oversold intraday, we might see a modest recovery as the weekend looms. 

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