Technical analysis: key levels for FTSE, DAX and Dow

The technical picture looks quite good for the main indices, and while this is a good thing we can’t ignore the prospect of headlines negating the current moves.

A man looking at data
Source: Bloomberg

Quite a macro-heavy week is in play, particularly for the FTSE with the Bank of England Inflation report likely to produce a little bit of choppiness. Tomorrow in particular will give clues in respect of global growth, and this could see a little caution prevail today.

FTSE could see profit-taking

The FTSE managed to push through 6620 yesterday and challenged the 6645-50 level as the trading session came to a close. The rising relative strength index, coupled with last Friday’s bullish candle, indicates we may now have a bottom in place for the UK benchmark.

This 6650 level needs to be overcome now if we are to have a near-term strike at 6680-90 then 6730.

The 200-day moving average lies in the way of upside through 6700, so should the FTSE charge higher we may see a degree of profit-taking at that level.

The 6580 level is the key support, and any moves back through here could target last week’s lows around 6506.

DAX remains under pressure

Attempts to push through the 9200 level yesterday failed to come to fruition, so the DAX remains a little under pressure despite the 1.9% gains posted.

A close above 9180 could help put the index on a more convincing drive upwards. This, with the daily RSI breaking back from oversold, would embolden a move towards 9340. The RSI is starting to look a little flat and the 200-hour moving average is the sticking point on the intraday chart.

We could be seeing an inverted head and shoulders pattern unfurling on the one-hour chart – a break through 9230 would help it materialise.

Support lies at 9088 then 9030.

200-DMA key support for Dow

The Dow Jones also took a look above the 16,600 level but failed to execute a daily close. Key support is at the 200-DMA (16,390) but one might expect to see the 16,515-20 level offer an element of support, given the coordinates of the 50- and 200-hour MAs which are currently attempting to manifest a golden cross on the same timeframe.

A break through 16,615 targets the 100-DMA at 16,672.

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