Levels to watch: FTSE, DAX and Dow

Global indices tumble, with the DAX in particular showing signs of weakness. However, with the Dow remaining in a bullish trend and the FTSE in a range, a single directional bias is hard to come by.

German stock exchange
Source: Bloomberg

FTSE falls towards range support

The FTSE 100 is tumbling this morning, in a move which is consistent with the range that has been dominating price action since the beginning of March. Typically this index tops out around 6200-6220 and bottoms out within the 6067-6100 zone.

This means that while we are seeing a deterioration, it may not sustain for long and thus intraday bullish reversal signals should be watched out for as possible signs that we are set to return to the top of the range. A closed 4-hour candle below 6067 could provide us with a warning sign that this bounce may not come.

DAX rolls over once more
The index is selling-off sharply, in a continuation of the move we saw take shape on Friday. The creation of new highs have come to a halt over the past week and as such there was a clear potential for the DAX to roll over.

However, be aware that we have seen deep retracements in the past and thus the true test will be whether we can see a break below 9396. For now, further downside is expected unless we see an hourly close above 9900. Support levels of note are 9615, 9563 and 9396. Resistance levels to watch are at 9900, 9928 and 10,121.

Dow pullback gives bulls an entry
The index has turned lower once more overnight, bringing us back towards the 76.4% retracement of 17,631 and 50-period simple moving average (4-hour). Given the clear uptrend in play, a bullish view remains unless we see an hourly close below 17,572.

As such, a bounce seems likely to occur in today’s session to continue this uptrend. Should this occur, 17,845 would be the key near term target for the day. Conversely, a break through 17,572 would look towards 17,399 as the next major support.

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