Levels to watch: FTSE, DAX and Dow

Indices lacking any real direction, yet DAX triangle provides best evidence of possible impending breakout volatility.

Data
Source: Bloomberg

FTSE lacking clear direction, yet early bounce sets bias

We have seen the FTSE 100 moving in short-term trends over the past week, with periods of strength or weakness only lasting around two days at a time. This week has seen very little notable direction, with yesterday seeing the index grinding lower and this morning seeing a similarly unenthusiastic recovery.

For the short-term outlook, I am driven by the creation of a new high this morning, alongside the new higher low which provides a greater chance of upside as long as price does not fall back below the 6331 support level.

Upside resistance would be expected around 6409, 6429 and 6454. However, given the relatively short nature of recent trends, there is no evidence to say that we will trend in any meaningful way for the time being.

FTSE 100 chart

DAX ascending triangle points to break higher

The DAX has been trading within an ascending triangle formation over the past week, creating higher lows with resistance around the 10,188 mark.

This morning has seen another failed break higher, with the index selling off once more. However, I would see any move lower to be temporary and thus I am bullish unless price moves back below 10,105.

Prior to that, support would be likely around 10,123 (100-hour SMA and trendline). Upside resistance levels to watch should we break out this triangle formation would be expected 10,328 and 10,340.

DAX chart

Dow continues to move gradually higher

The Dow Jones continues to make marginal gains, with price coasting higher. Any pullback to the 200-hour SMA would be likely to find support given the respect seen at the end of last week.

However, for now I am looking for the continued creation of new higher highs and higher lows as has been the case throughout the past three trading days.

That means price using this current selloff to move higher once more without passing back below 17,164.

Dow Jones chart

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