Levels to watch: FTSE, DAX and Dow

Overnight gains do little to dent the bearish outlook for indices, with the FTSE and Dow looking particularly likely to break lower from here.

New York Stock Exchange traders
Source: Bloomberg

FTSE turning lower from resistance zone

The FTSE 100 has begun to weaken following a doji candle posted at the 200-period (4-hour) simple moving average (SMA), which is marginally below a notable ascending trendline. Despite a sizeable bounce overnight, we would need to see an hourly close above 7354 to negate the recent signs of weakness in this market.

The 7262 support level needs to be broken to really provide confidence of a ramp up in selling. However, for now it looks likely that we will see further downside from this resistance zone.

FTSE chart

DAX rally moves towards crucial resistance level

The DAX has pushed close to the crucial 12,098 resistance level this morning, following yesterday’s new higher low.

Given that inability to break below 11,850, a push through 12,098 would set up a significantly more bullish picture. However, until that happens there is a good chance we will see some downside from here.

DAX chart

Dow back into Fibonacci and horizontal resistance

The Dow Jones is similarly at a key juncture here, with the recent downtrend well intact despite the overnight rally.

The price has come into the 50% retracement, which coincides with the 20,583 low from last week. While we continue to trade below 20,756, a bearish outlook remains in play. 

Dow Jones chart

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