Technical analysis: key levels for FTSE, DAX and Dow

A little profit taking could happen today after such stellar moves over the past number of sessions. The dissention in the Bank of England was expected but it must be kept in mind that although two members voted to hike rates by 0.25%, this decision was made prior to the lower-than-expected inflation figures earlier this week.

Man looking at data on a screen
Source: Bloomberg

Federal Open Market Committee minutes later this afternoon could give us further clues as to which central bank will move first.

FTSE finds support at 100-DMA

The FTSE 100 appears to be trapped below the 6780 level, with the 100-day moving average providing support and the rising trendline support from the June 2012 lows coming in at 6745, also helping to scupper any significant downside moves. A move through resistance would target 6830.

Daily relative strength index is starting to turn down a little but remains above 50.

On the shorter time frame, the bullish channel from the 8 August lows is still intact. Any major breach could see the FTSE make a return to the 100-hour MA at 6730.

DAX could reach 9255

The DAX is also struggling to make a proper dent in the 9340 level (38.2% Fibonacci on daily chart and 61.8% on one-hour chart) but appears to be finding some support around 9300 and the 50-hour MA. Daily RSI is starting to lose a little momentum.

Any additional puncturing of the 50-hour MA would send us back to 9255 and the 100-hour MA. Short-term, RSI is looking a little oversold but not unduly so. Key support intraday lies at 9180.

Dow could test 16,800

The Dow Jones poked its head above the 16,900 level yesterday but has since retreated, unable to affect a daily close through what was a significant support level throughout July. Support comes now from the 50-DMA at 16,846.

The 16,923 level represents the 76.4% retracement from the July highs to the recent lows at 16,262, so a break through here would put the Dow on sure footing for a bid at 17,000, then 17,040. Any moves back through 16,850 might see the 16,800 level tested.

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