Levels to watch: FTSE, DAX and Dow

European markets attempt to break lower, with the DAX leading the way. However, with the Dow currently respecting trendline support, bearish confirmation is yet to come.

Traders watching data screens
Source: Bloomberg

FTSE at significant support level
The FTSE has once again pulled back, in a continuation of the consolidation that has dominated March so far. At present, the index is resting just above the 6128 level (29 January peak) and ascending trendline. As such, this is likely to be a pivotal area for the index today, where a closed hourly candle below 6100 would provide a bearish signal, with 6050, 6032 and 6000 the next support levels in view.

While a move below 6100 would provide a short-term bearish view, the 6032 level would need to be breached for expectations the weakness could continue. Alternately, should this 6100 level hold, we could see this provide a base once more for a push back to 6220 resistance. 

FTSE 100 chart

DAX breaking through H&S neckline
The DAX is also showing signs of potential weakness. However, with this index, we have a clear topping pattern, with a head and shoulders pattern formed given the current break through the 9695 neckline. For the bearish view signified by this pattern to be confirmed, we would need to see a closed hourly candle below 9695.

Should that occur, we would be looking at a projected target for the pattern of 9488. Early trading is showing a likely break, yet it is important to await a closed candle. Support levels in view in the case of a break are 9623, 9563 and 9488.

DAX chart

Dow sells off from trendline resistance
The Dow Jones has been pulling back from the upper boundaries of a rising wedge pattern, with price pulling back to a near-term support trendline which has underpinned price action throughout March.

Given the selling evident in European markets, there is a possibility of a bearish effect upon the Dow, yet we would need to see a closed hourly candle below 16,918 to confirm a bearish outlook for a move towards trendline support (currently 16,850) and 16,764 levels. Otherwise should this current trendline support hold, we could see a bounce for a continuation of the recent channel. 

Dow Jones chart

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