Levels to watch: FTSE, DAX and Dow

Yesterday’s trading activity saw markets finish off the lows, with indices continuing to recover in the overnight session. 

Trading screen data
Source: Bloomberg

The final day of the quarter is upon us and the performance over the past three months has been decidedly mixed. The FTSE 100 and DAX are likely to finish negative for the quarter – bar some major rally today – but the Dow Jones is still likely to eke out a gain of around 1.5%.

Recent FTSE gains capped at 6670

Support for the FTSE continues to be found in the 6630/6640 zone. Gains over the past two days have been capped at 6670, so a close above here targets the 200-DMA at 6733 and then beyond that the 50-DMA at 6754.

Any close below 6630 would open the way to 6600 and then 6585, and with the daily relative strength index still edging lower the downside scenario would seem to have the upper hand. Traders waiting for a bounce would be best served by waiting for this indicator to rise back to 50.

DAX finds support at 9400

As the FTSE was reluctant to go through 6600, so the DAX is unwilling to push below 9400 for the time being. A surprise jump in German unemployment is certainly dampening bullish sentiment, so a close below 9400 targets 9360.

On the upside, if the index can clear the 50-DMA at 9485 it looks set to return to the upward trend line at 9575.

The hourly chart shows that gains have been capped by the major moving averages, with the first target being the 50-hour at 9468.

Dow restores confidence to bulls

The bounce off the 50-DMA yesterday restored some confidence to the bulls after a volatile week, but the 20-DMA is holding back any more gains so far. The Dow continues to hold 17,000 so if we can see the daily RSI push back above the 50 mid-point there is reason to suspect a turnaround is in progress.

The first big objective on the hourly chart is the 200-hour MA at 17,144, and then the Wednesday/Thursday peak from last week just above 17,220.

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