Key index levels: technicals for FTSE, DAX, Dow

It’s non-farm payroll day and while the consensus figure is for a 200-plus number, in reality anything could happen given past experiences.

Global indices are, for the most part, looking fairly bullish and you could say that this number, or the expectations of it, is priced in to some extent.

The 1900 level on the S&P 500 is probably an old resistance point and one could expect profit-taking at that level.

It’s going to be a choppy day.

FTSE trapped below 200-period MA

Three tests of the 6682 level over the past three trading sessions and price action have trapped the FTSE below the 200-period moving average on the four-hour chart.

I mentioned this particular metric yesterday and still have the opinion that it will be the pivotal point to watch if we are to see higher highs in the UK benchmark. The 6730 level would be a near-term target.

Support at 6640 is still holding with 6624 coming in beneath it, which is essentially the rising support from the March 20 lows.

Dow showing bearish divergence

We saw a new intraday record high on the Dow Jones yesterday, though not quite as good as the brand new high on the S&P 500, taking us back to the December highs of 16,594. The relative strength index, on the day, is currently slightly overbought. The weekly RSI is showing bearish divergence, however, and the last couple of times that occurred we saw a correction of around 5-7% over the next few weeks.

Again the crossing of the 50-day moving average through the 100-DMA yesterday tends to invite additional upside. The one-hour chart is showing price action at the top of the bullish channel, which is in action since 16 March. Having risen in a somewhat parabolic mode since last Friday, the RSI is showing some bearish divergence too.

Support comes from the 50-hour MA at 16,570, then 16,511 and 16,430.

DAX breaches resistance

The downtrend resistance from the 24 January highs has been breached but we have yet to see a real test of the 9700 level in the DAX

We saw the break through yesterday’s highs of 9647 but not a daily close. It’s still in a tight consolidation range for now with support at 9540 should the 9595-9600 succumb to selling. The four-hour chart could be showing a pennant formation which, if broken to the upside, targets 9735.

Beware the bearish divergence on the same timeframe.

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