Technical analysis: key levels for FTSE, DAX and Dow

Markets have edged back this morning, with the DAX particularly hard hit after a surprising jump in German unemployment. Nonetheless the scenario still tends to the bullish side, even if US futures point to a weaker start.

A man looking at a chart
Source: Bloomberg

FTSE holding above 6800

Although dropping back this morning, the FTSE still looks reasonably healthy, holding above 6800.

After the bounce from sub-6600, a degree of weakness was to be expected, but 6790 should provide support in the first instance, and even 6750 would not change the more optimistic picture that has developed on this index in recent days.

The 6830 region is the major level that the index must break if it is to challenge the 6880 level.

As I have noted before, the 100-hour moving average has held up well as a support level, for example on Tuesday, so the zone around 6800 should be watched carefully. The intraday relative strength index is moving into oversold territory and recent dips to this level have seen rapid bouncebacks.

DAX probing 9500

The attempt to clear the 9600 level and the 50-day moving average yesterday failed here, and this morning the DAX is probing 9500 once again. Immediate support may well be found around 9450, the rising trendline from the 2011 lows.

Beyond this the 9370-9400 zone could find buyers, while 9600 and then 9640 are important as possible resistance.

For now the 100-hour MA is holding on the hourly chart, a dip through this area having been bought, while the intraday RSI sits deep in oversold territory.

Dow supported by 17,000 level

The Dow Jones has begun to work off its overbought condition on the daily RSI, as a natural selling process gets underway after the major rally of the past three weeks.

The 17,000 level should be a first support, but even a drop towards 16,920 would still maintain the upside bias evident here. Even if the index does not quite succeed in making a new weekly and monthly closing high, the scenario still points to additional upside.

The index has dipped through the 50-hour MA and is now testing the 100-hour, but with the 200-hour rising and sitting close to 17,000 anymore sustained dip should encounter support here.

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