Levels to watch: FTSE, DAX and Dow

Indices continue to pull back following last week’s resurgence. However, will that rally mean the current moves are merely retracements before another move higher?

Data board
Source: Bloomberg

FTSE continues to grind lower
The FTSE continues to move lower in a retracement of the bullish move we saw last week. It was crucially notable that last week saw a close back above the 5916 swing high. This provides a good clue that we could form a new higher low for another bounce. For now, we have seen no bullish reversal signals and thus this selling pressure is expected to continue until we see a short-term bullish reversal signal.

So far, this morning has found support at 5768, which marks a cluster support from last week. However, we would need to see an hourly close back above 5846 to become bullish once more. Until that happens, further losses are likely.

Support levels of note are 5764, 5737 and 5600. Resistance levels are at 5846, 5916 and 5953.

DAX retracement continues
The DAX is in a similar position, where a move above 9759 last week provided a good potential for further upside to come. However, for now we are seeing the index continue to retrace that move, with price having found support at the 50% retracement so far today. Further losses are likely unless we see an hourly close back above 9700 which would initiate the bullish view once more.

Key resistance levels are 9700, 9776 and 9853. Support levels of note are 9554, 9483, 9410 and 9300.

Dow sells off from SMA
Unlike the FTSE and DAX, the Dow Jones has failed to break through last week’s initial swing high (16,278). This four-hour chart shows there is a clear selloff from around the 50-period simple moving average (four-hour) with price currently finding support at the 61.8% retracement of 15,713.

Given the moves in European markets, there is a good chance we could see this market find a bottom and push higher in a similar manner to that expected in the FTSE and DAX. Thus, be on the lookout for intraday bullish reversal signs. Until then, further downside seems likely given the strong selloff we have seen this week so far.

A close above 15,912 would be need for a bullish view to come into play. Key resistance levels of note are 15,848, 15,912, 15,970 and 16,008. To the downside. Key support levels are 15,713 and 15,450.

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