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Levels to watch: FTSE, DAX and Dow

Indices start to weaken, with the DAX reversing from trendline resistance. Meanwhile, is the Dow Jones finally heading towards the exit of a month-long consolidation phase?

Data
Source: Bloomberg

FTSE in triangle pattern as we await next move

The FTSE 100 is consolidating within a very interesting area, following the pullback from the all-time high of 7127. Crucially, we are seeing the market constantly hold up from a key area of support, between 6932 and 6950 (August and September highs).

The breakout from this triangle will ultimately dictate the state of play, with an hourly close below 6932 required for a bearish view to come into play.

Conversely, an hourly close above 7055 would provide a bullish outlook, for another challenge of 7127. Until either occurs, this triangle is expected to remain in play.

FTSE 100

DAX reversing from trendline resistance

The DAX has turned lower, following a rally into trendline resistance. Given the fact this market has set four consecutive lower highs over two months to create the downward channel currently in play, there is reason to believe this could be the fifth.

On the hourly chart, the break below 10,618 sees the index not only break a new lower low, but also push below the key Friday high. As such, there is reason to believe we are seeing a reversal in play for the DAX and a bearish view is on play unless we see an hourly close above 10,694.

The triangle pattern in the stochastic oscillator provides us with a clue that we could see momentum break lower too. Watch out for a break of trendline support for another signal that this sell-off is coming to fruition. 

DAX

Dow seeks to break lower from triangle

The Dow Jones is attempting to break lower from yet another symmetrical triangle this morning. The index has been in a month-long period of consolidation, where we see triangles within triangles, with little in terms of follow through upon breaking out. We are currently seeing a bearish breakout, which would be confirmed by an hourly close below 18,060. However, we may finally be seeing the latter stages of this consolidation, where higher highs and low have turned to lower highs and lows.

This points towards a possible break lower from here. Should we see an hourly close below 18,060, this would point towards a move into the 17,978-17,907 support zone before long. 

Dow Jones

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