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Levels to watch: FTSE, DAX and Dow

With the crunch point for Greece out of the way for now, indices have moved higher this morning, with key support coming into play for a number of markets. 

US traders
Source: Bloomberg

FTSE 100 could move to January lows

The index has clambered off the lows seen yesterday, but we still have to see a close above 6600 to suggest that a bottom was put in place yesterday. Daily stochastics and relative strength index have yet to turn bullish, but with non-farm payrolls, a US holiday and the Greek crisis all on this week sellers need to be very careful as well.

So far on the hourly chart the index has yet to break the 50-hour EMA (6590), a problem that has existed since 25 June, so any turnaround needs to start with this first.

A move below 6500 would put us back in course for the January lows in the direction of 6300, giving back almost all the gains for the year.

FTSE 100 chart

DAX bulls eye move above 11,229

The DAX has shown an impressive reluctance to move below 11,000 for any sustained period of time. If we can move back above 11,229 then the bullish scenario can be restored, but daily stochastics have yet to show any significant turnaround. If the index does move below 11,000 then the next target becomes 10,865 and then the 200-day SMA at 10,635.

With Greece dominating headlines, the safest course may be to sit and await better entry points later on. 

DAX chart

Dow could drop to 17,200

Futures are pushing back above 17,700 once again, the index having tested key support at 17,600 yesterday. Incidentally, the S&P 500 bounced off its 200-day SMA yesterday, which may be taken as a fairly bullish sign.

If the Dow Jones can get back above its own 200-day SMA (17,709) today or tomorrow, US markets may acquire a much more bullish tinge to their movements. If we do sell off back below 17,600, then the index would head towards the January lows around 17,200. 

Dow Jones chart

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