Key index levels: technicals for FTSE, DAX, Dow

The mining sector has come under pressure as China worries are at the forefront of traders’ minds. 

FTSE fails to build on momentum

Copper is down 10%, which hasn’t helped the FTSE 100. Gold prices  should be watched, however, as any daily close through $1361/oz is likely to see the gold mining companies catch a bid.

The failure to sustain any moves through 6770, more specifically through 6800, has seen the FTSE falter further. We may well be looking towards a move back to the 200-daily moving average which currently resides at 6580. For now, support is coming from the 6615 level, so any prolonged move through here will probably see this occur sooner rather than later.

Any rallies back to 6650 may see additional offers, as we are now in a bearish channel on the one-hour chart from the 6800 highs. Any moves through the trendline resistance at 6650 will target 6690.

The short-term relative strength index is looking slightly oversold.

DAX could reach February lows

It’s been quite a drop for the DAX, with price action now around 9200 – we can possibly expect a minor bounce – the four-hour chart is showing some bullish divergence. The longer-term trendline support from the lows of late June/early July should also support this.

We are trading below the 100-DMA so one would expect any rallies to be capped at that level (9350), with 9283 also providing a degree of upside resistance.

Any pushes down through the 9193 level could bring the February lows into view at 9080.

Dow remains on the upside

Despite the fact that the S&P 500 managed a new all-time high recently, it is notable that the Dow Jones failed to do the same. The doji candle from 7 March, followed by the bearish candles since, could indicate more downside here.

We are still trading above the key daily moving averages so the overall long-term trend for the Dow is on the upside. Equally, there is trendline support coming from the 5 February lows at 15,338 (one-hour chart).

We will need to watch 16,280 for support, then 16,250 (100-period MA on the four-hour chart), with the 50-DMA at 16,157 a likely target if we see a daily close below this.

Resistance at the 16,360 level will need to be breached if we are to retarget 16,450, where we are likely to run into resistance.

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