Levels to watch: FTSE, DAX and Dow

Indices turn lower once more this morning. However, with the FTSE 100 and Dow Jones at key levels, things could get worse.

Data
Source: Bloomberg

FTSE breaks down to critical support level

The FTSE has crashed through the crucial 6060 support yesterday, providing a good chance of a bearish head and shoulders formation. The ability to break and close below 6006 is going to be key to the day’s price action as this definitively confirms this pattern.

With price currently attempting to do exactly that, a closed hourly or four-hour candle below this level will likely spark another sharp move lower for the index today, with few major support levels to the downside. Conversely a break and close above 6042 would negate this bearish view. 

ft

DAX attempts to break lower once more

The DAX has seen yet another leg lower this morning, within a clear downtrend that has been in play over the past week. Price is currently retracing higher, yet further downside seems the most likely outcome from here.

Support levels are few and far between, with the early April low of 9441 the next in view. However, to the upside we have a number of resistance points at 9633, 9760 and 9907. An hourly close above 9633 would provide a more neutral outlook.

DAX

Dow down to key support zone

The Dow has sold off into a notable area of support overnight which should dictate the state of play for the coming days. A break and close below the 17,686-17,662 zone would negate the uptrend in place over the past three weeks.

As such, watch out for a reaction around this area, be it a bounce or else a sharp move upon breaking the level. Ultimately the index is approaching a key juncture.

DJ

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