Technical analysis: key levels for FTSE, DAX and Dow

As we approach Labor Day weekend, low trade volumes may well subside even further, and this could bring about some sharp moves in equity trading. Uptrends for all indices remain intact.

Man looking at data on computer screens
Source: Bloomberg

FTSE could reach 6875

The 6830 level, which was a target last week for the FTSE 100, is now acting as the key resistance to additional upside. While below this level, there remains a risk of a pull back towards 6800 with 6780 as support residing below that.

The current range of around 45 points leaves the FTSE in a consolidation pattern so a break down through either the main resistance or key support could result in a measured move. On the upside, this targets 6875. On the downside, assuming the 200-hour moving average gives way, this takes us back towards 6740.

Dow could see support at 17,081

As we approach Labor Day weekend in the US, the Dow Jones is flirting with its new all-time high so it’s important to keep an eye out for any moves through the 17,154 level. Daily relative strength index is looking a little overbought. One could, however, expect to see a minimum 100-point move upwards should we witness a daily close through the high.

Support is still coming in at 17,018 then at 16,980, with 16,910 bringing up the rear should any downside punctures occur. We have bearish RSI on the one-hour chart so, given recent volumes, we could be looking at a degree of sideways action today.

DAX capped by 50-DMA

The weekly uptrend is still intact for the DAX with rising support coming in at 8900. The index managed to hit the 9600 level earlier this week, but is currently capped by the 50-day moving average at 9565 with no daily close seen above the round the number as a result. Although tested in the intraday with the index falling to 9416 yesterday, support is being found at 9476 — the 50% retracement of the move from the all-time highs to the lows of August 8.

The four-hour bullish channel is working in the favour of additional upside with the crossing of the 50- and 200-MAs. While above 9470, we may see another test of the 9600 level.

A continuous push through 9613 targets 9708. Any drop backs through 9410-20 and the 200-H MA would see the DAX pull back towards 9345.

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