Levels to watch: FTSE, DAX and Dow

The major indices have shown signs of a potential bearish reversal, with June event risk looking like a key catalyst to send traders towards safer investments.

Data
Source: Bloomberg

FTSE sell-off could be on

The FTSE 100 fell sharply yesterday, following on from a week-long period of consolidation. This pullback comes at a time when the uptrend had been slowing and thus this move portrays last week as a period of exhaustion. The shallow rally overnight has since created a flag formation which points towards a high likeliness of further losses today.

With that in mind, there is a good chance that we have seen some form of top for this rally, with a retracement in the offing. As such, a closed candle below 6207 is the key for another move lower, with 6197 and 6179 the next key support levels. This seems highly likely, given the sharp pullback we have seen since the open. Interestingly, this takes us back into the three-week range of May. 

FTSE

DAX begins to trend lower

The DAX also took a turn for the worst yesterday, following on from a clear uptrend over recent weeks. The ability to break through yesterday’s low of 10,228 is key here, with an hourly close below likely to spark another sharp move lower.

Given this possible top in play, we would need to see an hourly close back above 10,291 to negate yesterday’s bearish moves. Key support levels of note are 10,228, 10,175 and 10,154, with resistance at 10,291 and 10,328.

DAX

Dow sells off from Fibonacci resistance

The Dow Jones is also selling off heavily this morning, with the index having found resistance upon the 50% retracement of yesterday’s move lower. Much in the same manner as the other two markets, we are looking highly likely to be moving into a sharp retracement for this market and thus a break below yesterday’s low of 17,723 would not be surprising today.

As such, a bearish outlook in now in play, with 17,723 the next support level. This morning’s high of 17,827 is crucial as the major point of resistance.

DJ

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