FTSE 100, DAX and Dow decline towards critical support levels

​​FTSE 100, DAX and Dow start to roll over, yet key support level remain key hurdles for the bears.

FTSE 100 rolls over after rally into Fibonacci resistance

The FTSE 100 has been weakening from the 76.4% Fibonacci level, with the index having retraced in the wake of a bearish break below 5571 last Wednesday. That seemingly set us up for a potential move lower from here, with the break below 80 on the stochastic pointing towards a bearish leg lower.

With that in mind, the big question is whether we break below 5529 to bring about another bearish signal. With the decline in momentum still playing out, further downside does look likely from here. This bearish short-term picture would be negated with a rally up through 5846 resistance.

DAX weakens from trendline resistance

The DAX has also been weakening after a failed bid to create a new high, with the index finding resistance on an ascending inside trendline. Once again the question is whether we can break below the key 10,152 support level to bring about a more reliable bearish picture for the index.

Until then, there is a chance we could be retracing as a precursor to further highs. With that in mind, while momentum highlights the potential for further downside, this bearish outlook would gather strength if 10,152 is taken out. To the upside, a rally through the 10,773 level would be needed to maintain the wider bullish trend.

Dow Jones approaches key support level

The Dow has seen significant declines overnight, with the index pushing towards the crucial 23,089-23,208 zone of support.

The key question for today is whether that area holds up, with a break below that zone signaling a likely bearish phase coming into play. As such, watch out for the ability or inability to break below 23,089 to signal whether we should be bullish or bearish from here.

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