Technical analysis: key levels for FTSE, DAX, Dow

Today has seen low volumes and some small declines for indices in Europe and the UK.

A trader on the phone
Source: Bloomberg


FTSE supported by 50-DMA

6880 remains the big level to break on the upside for the FTSE 100, and until this is cleared it cannot be said with certainty that there is more upside in play here.

If we finally do get beyond 6880, it is only the FTSE playing catch up with other indices, a long overdue occurrence. The 50-day moving average provides first-line support in case of any near-term weakness.

Only a close back below the 20-DMA and then on towards 6750 might indicate this was just another indecisive move.

DAX direction uncertain

The high for the Duitsland 30 is 10,050.98, which was hit on 20 June. Until we see a close above here it is not certain that this move is going to continue, despite the spike back through 10,000. Certainly, today is not the day to initiate new longs, what with the US on holiday today and volumes light.

A close through 9900 would be the signal for further losses for this index, but the 50-DMA has acted as support in recent days and this, currently at 9813, is another area to look for.

Dow close to overbought levels

Momentum indicators such as moving average convergence divergence (MACD) and stochastics indicate that the current move higher in the Dow Jones has legs, although the index is getting perilously close to overbought levels.

Even a drop back towards 16,800 would not endanger the uptrend from the April lows, although it would flush out those long positions that were late to the party.

In the short term, the 16,900 level, around the 200-hour moving average, will act as interim support, and may offer a potential entry point.

US markets are closed for Independence Day, but will be open at IG based on futures markets until 6pm.

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