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FTSE 100, DAX and Dow ease back overnight

​​FTSE 100, DAX and Dow fail to gather momentum, with overnight losses highlighting potential short-term downside.

FTSE 100 consolidates above key support zone

The FTSE 100 has been consolidating overnight, following a decline into the key 6135 support level yesterday morning. Coming off the back of a previous rise through the 6264 level, we are now looking at a more bearish breakdown if we see price drop below the 6124 region.

Nevertheless, looking at the price action over the past month, we can see that short-term declines could simply provide another leg within a period of consolidation that is yet to end. As such, levels such as 6082 and 6026 would be the more important levels that need to break if we are going to take away a more bearish outlook for the pair. Until then, short-term weakness could simply provide another downside leg within a consolidation phase.

DAX declines take us back into key support

The DAX has dropped into near-term support at 12,473, marking an end to the short-term intraday trend of higher lows.

This could instigate the beginning of a wider retracement of the rally from 11,957, yet it makes sense to await a break below that 12,473 level to bring that bearish short-term picture into play. As such, the near-term direction will be dictated by the break through either 12,473 or 12,846.

Dow stays within short-term uptrend despite overnight weakness

The Dow Jones has eased back overnight, as the index continues to trade within a bullish phase seen since the 24,913 low from late June.

With the price thus far unable to break through the crucial 26,423 level, we need to see a break through that level to bring about a potential bullish inverse head and shoulders pattern. To the downside, a break below the 25,564 level would bring about a more bearish outlook for the short term.


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