Technical Analysis: key levels for FTSE, DAX, Dow

Despite a bounce in the US yesterday, European and UK markets are struggling again this morning.

A trader in the New York stock exchange
Source: Bloomberg

FTSE eyeing 100-DMA

The FTSE 100 is looking at breaking the 100-day moving average for the first time since early April, with the 200-DMA only a short distance away at 6700.

At the time of writing the index was pushing towards the 25 June lows, which lies at 6715. A drop through here and then a loss of the 200-DMA would leave the index perilously open to a retest of the April low at 6500.

Only the recovery of the 50-DMA would signal that the index had turned a corner, and then the index would need to breach 6880 if it was to see a surge to all-time highs around 6934.

DAX supported by 9765

A salient feature of major indices at the moment is a declining relative strength index, showing buying pressure evaporating as the summer goes on.

The 25 June low of 9835 is the first line to watch out for, and a drop through here would bring the 50-DMA (currently at 9811) into play. Aside from some support around 9765, the worry for Germany 30 watchers (or at least for DAX bulls) is that there is precious little support beyond that until the 100-DMA.

Optimists are probably hiding at the moment, waiting for a fresh moment to emerge, but a close back above 9900 would provide such a moment, and would at least offer hope that we can move back to the June highs of 10,024.

Dow uptrend intact

US markets are the Obi-Wan Kenobi for bulls at the moment, being their ‘only hope’ (cf. Star Wars, episode IV). In both the Dow Jones and S&P 500 the uptrends from April are intact. The close above 16,800 yesterday for the Dow was a positive sign, as a probe through this was swiftly defeated.

While the position on the Dow still remains bullish, it needs a close back above 16,950, and ideally above 17,000 to signal the end of the current bout of indecisive trading. Until then, supports around 16,830 and 16,750 should provide stabilisation points.

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